Oil settles more than 5% lower on demand concerns, Brent at $88

Oil drilling rigs

Oil prices fell to their lowest level since last January today, Sept.7, as demand concerns persisted amid the rise of the US dollar.

China's stringent zero-COVID policy has kept cities such as Chengdu, with 21.2 million people, under lockdown, curbing people movement and oil demand at the world's second-largest consumer.

The Federal Reserve's Big Book report showed that the prospects of US economic growth appear weaker over the next year, with signs of weak demand.

Commodity prices in general have also come under pressure as the US dollar continues to trade near 20-year highs against major currencies, making it more expensive to buy commodities for holders of other currencies.

In its short-term outlook report, the US Energy Information Administration raised its expectations for Brent and WTI crude prices for 2023, while lowering its estimates of oil production in the United States during the current and next two years.

Brent crude recorded a decline of 5.2%, equivalent to $4.83, to settle at $88 a barrel.

WTI crude also fell 5.7%, or $4.94, to $81.94 a barrel.