Oil plunges to eight-month low on strong dollar, recession fears

Oil prices plunged about 5% to an eight-month low on Friday as the U.S. dollar hit its strongest level in more than two decades

Brent futures were down $4.35, or 4.8%, to $86.11 a barrel early Friday while West Texas Intermediate crude fell $4.58, or 5.5%, to $78.91.

As fears that rising interest rates in several countries will tip major economies into recession, both benchmarks are on track for their lowest close since January.

For the week, WTI was down about 7% and Brent down about 6%, setting the fourth straight week of declines.

After the Federal Reserve raised interest rates by 75 basis points on Wednesday, central banks around the world followed with similar hikes, raising the risk of economic slowdown and shaking global markets.

The U.S. dollar was on track for its highest close against other currencies since May 2002.

According to analysts a downturn in business activity across the euro zone deepened in September as global equities hit a two-year low on Friday.

British government bond yields surged in response to the government’s plans to reduce taxes, and the pound slid to a 37-year-low against the dollar, spurring selling in other currencies.