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Brent crude futures fell $2.81, or 3.11%, to $87.65 a barrel by
1051 GMT. U.S. West Texas Intermediate (WTI) crude futures were
also down, retreating by $2.93, or 3.51%, to $80.56.
Front-month Brent and WTI contracts were down 4.03% and 5.37%
respectively over the past week.
Global equities hit a two-year low on Friday while the dollar
index reached its highest level in two decades, putting downward
pressure on oil.
"Recession fears, further rate hikes and the consequent dollar
strength trumps geopolitical tension," said Tamas Varga, oil
analyst at PVM Oil Associates.
"The upside in oil will be limited while the dollar is strong,
albeit the weekend's staged referendum in the eastern part of
Ukraine could further increase tension between Russia and the
West, especially if Ukrainian allies provide additional help for
Ukraine to reclaim these territories."
Russia launched referendums on Friday aimed at annexing four
occupied regions of Ukraine, which Kyiv called an illegal sham
that it said included threats to residents if they do not vote.
After the U.S. Federal Reserve raised interest rates by a hefty
75 basis points on Wednesday, central banks around the world
followed suit with hikes of their own, raising the risk of
economic slowdowns.
A downturn in business activity across the euro zone deepened in
September, a survey showed, suggesting that a recession is
looming as consumers rein in spending to contend with a cost of
living crisis.
In Britain, meanwhile, the pound fell to a 37-year low and
government bonds crashed after the new finance minister
announced historic tax cuts and huge increases to borrowing.
On the oil supply side, efforts to revive the 2015 Iran nuclear
deal have stalled as Tehran insists on the closure of the U.N.
nuclear watchdog's investigations, a senior U.S. State
Department official said, easing expectations of a resurgence of
Iranian crude oil exports.
(Reporting by Julia PayneAdditional reporting by Emily Chow in
SingaporeEditing by David Goodman)
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