Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Oil prices fall over 2% as Fed hikes interest rates

Commodities Jun 15, 2022 03:16PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Models of oil barrels and a pump jack are displayed in front of a rising stock graph and "$100" in this illustration taken February 24, 2022. REUTERS/Dado Ruvic/Illustration


By Arathy Somasekhar

HOUSTON (Reuters) -Oil prices fell more than $3 on Wednesday as markets worried about a fall in demand after the Federal Reserve hiked interest rate by three-quarters of a percentage point.

Brent crude futures for August settled down $2.7, or 2.2%, at $118.51 a barrel, having fallen as low as $117.75. U.S. West Texas Intermediate crude for July fell $3.62, or 3.04%, to $115.31 a barrel, after dropping to a low of $114.60.

The biggest hike by the U.S. central bank since 1994 also sent dollar higher with the dollar index rising to its highest since 2002. A stronger greenback makes U.S. dollar-priced oil more expensive for holders of other currencies, curtailing demand.

Meanwhile, U.S. crude production, which has been largely stagnant over the last few months, edged up 100,000 barrels per day last week to 12 million bpd, its highest level since April 2020, data from the Energy Information Administration showed. [EIA/S]

"A little bit of that uptick in domestic production maybe the first sign of more to come there," said John Kilduff, a partner at Again Capital LLC.

The data also showed a build in U.S. crude stocks and distillate inventories, while gasoline posted a surprise drawdown on the back of the summer driving season.

Drivers around the world were tolerating record-high prices for road fuels, data showed.

The European Central Bank promised fresh support and a new tool on Wednesday to temper a market rout that has fanned fears of a new debt crisis on the euro area's southern rim but appears to have disappointed investors looking for bolder steps.

Adding to demand woes, China's latest COVID outbreak has raised fears of a new phase of lockdowns.

Higher oil prices and weakening economic forecasts are dimming futures demand prospects, the International Energy Agency said.

But persistent concerns about tight supply meant oil prices were still holding near $120 a barrel.

The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, are struggling to reach their monthly crude production quotas, recently hit by a political crisis that has reduced Libya's output.

"Because OPEC production is still falling noticeably short of the announced level, this would result in a supply deficit of around 1.5 million barrels per day on the oil market in the second half of the year," said Carsten Fritsch, commodity analyst at Commerzbank (ETR:CBKG) in Frankfurt.

Oil prices gained some support from tight gasoline supply. U.S. President Joe Biden told oil companies to explain why they were not putting more gasoline into the market.

Oil prices fall over 2% as Fed hikes interest rates
 

Related Articles

Oil edges lower as supply disruption concerns ease
Oil edges lower as supply disruption concerns ease By Reuters - Aug 11, 2022 3

By Laura Sanicola and Muyu Xu SINGAPORE (Reuters) -Oil prices drifted lower on Thursday after gaining more than $1 in the previous session, as concerns over supply disruptions...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
Casador Del Oso
Casador Del Oso Jun 15, 2022 2:01PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Joe knows nothing about running any kind of business let alone an oil company.
Martin Wall
Martin Wall Jun 15, 2022 11:42AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
policy tightening could "pave the way for recession-induced demand destruction". They need to remember we have easy money policy, we are 5% off what rates should normally be at least
Jay Garrelts
Jay Garrelts Jun 15, 2022 9:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
That’s how I like my 19th century technology stable I got a super cell phone but I’m still fueling my vehicle like Henry Ford
TERRY HOUGHTON
TERRY HOUGHTON Jun 15, 2022 9:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Then why don't you buy an EV???
Murali Krishna
Murali Krishna Jun 14, 2022 10:21PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Where is your market genius Dr. Arnout? Bring him up. He has not been seen here lately.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email