Fears of a strong tightening of US monetary policy are clearly stronger than worries about tightening supply conditions in oil markets, brokers said.
West Texas Intermediate crude for December 12 delivery was at $89.35 a barrel on the NYMEX in New York, down 0.72 percent from a 4 percent gain in the previous two sessions.
December Brent ICE deliveries settled at $95.64 a barrel, down 0.54 percent.
Investors in the financial markets reacted negatively to these announcements Federal Reserve Chairman Jerome Powell Further interest rate hikes in the US.
“It is too early to think about a pause in the US interest rate cycle,” Powell warned after the Fed’s meeting on Wednesday. He added that Fed “has more to do”.
– Achieving this control for the economy requires a series of tariff hikes. We don’t know exactly where it is. Powell said he would release new economic forecasts at the December meeting.
Powell said the Fed still has room for improvement Further interest rate hikes in the USHowever, the pace of monetary tightening should eventually slow down.
– The suggestion that US interest rates will rise more than previously expected (Powell) will cause difficulties for commodity markets, including fuel, in the future, despite constructive fundamentals – says Warren Patterson, Head of Commodity Strategy at ING Groep NV.
The uncertain future of the economy of China, the world’s largest oil importer, does not bode well for higher oil prices in global markets. China’s highest health authority – the National Health Commission – has indicated that the Chinese authorities’ zero-tolerance approach to Covid remains a strategy to deal with the coronavirus outbreak in China.
The news came in reaction to earlier suggestions in the markets that China’s “zero Covid” policy could be relaxed.
Meanwhile, US crude oil inventories are dwindling. Last week, they fell by 3.12 million barrels, or 0.71 percent. 436.83 million barrels, according to the US Department of Energy (DoE).
Gasoline inventories fell by 1.26 million barrels, or 0.6 percent, during the period. 206.63 million barrels.
However, stocks of distillate fuels, including heating oil, increased by 427 thousand tonnes. barrels, or 0.4 percent. 106.78 million barrels, the DoE said.
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