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Oil prices drop with global inflationary concerns

Oil prices fell further on Friday as inflationary concerns and global demand uncertainty weighed on prices.

International benchmark Brent crude traded at $84.52 per barrel at 09.55 a.m. local time (0655 GMT), down 0.27% from the closing price of $84.75 a barrel in the previous trading session.

At the same time, American benchmark West Texas Intermediate (WTI) traded at $77.97 per barrel, a 0.24% fall after the previous session closed at $78.16 a barrel.

Uncertainty about central banks' interest rate policies fueled global recessionary fears, with high inflation rates indicating lower economic activity and an impending recession.

Inflationary concerns in the world's largest oil consumer, the US, continue to weigh on oil prices. Productivity in the nonfarm business sector in the US increased by 1.7% in the fourth quarter of last year, falling short of expectations.

The possibility of the US Federal Reserve raising rates again in July gained traction.

Expectations that the European Central Bank will continue to raise interest rates in 2024 also weighed on prices.

The European Central Bank is likely to hike rates by mid-March and further in May, Bank President Christine Lagard confirmed on Thursday.

Meanwhile, investor expectations of a strong demand rebound in China, the world's largest oil importer, are lifting market sentiment.

Economic recovery data in China is limiting a decline in global oil prices. In February, the Purchasing Managers' Index, an indicator of the economic health of the manufacturing sector, in China rose to 52%, the highest since April 2012.

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