Oil falls on demand concerns after US interest rate hike

Oil prices fell today, Thursday, after the Federal Reserve (the US central bank) raised interest rates, which led to the rise of the dollar and increased fears of a global recession that will hurt demand for fuel, however, concerns about supplies limited the decline in prices.

By 0750 GMT, Brent crude was down 85 cents, or 0.9 percent, at $95.30 a barrel. West Texas Intermediate crude futures fell $1.01, or 1.1 percent, to $88.99 a barrel.

And according to “Reuters”, the two crudes rose more than a dollar a barrel on Wednesday, supported by another decline in US oil stocks, despite the US central bank raising interest rates by 75 basis points and the announcement by its President Jerome Powell that it was too early to consider stopping Interest rate hike.

A stronger dollar reduces demand for oil, as the cost of fuel increases for buyers in other currencies.

An embargo imposed by the European Union on Russian oil due to Moscow’s invasion of Ukraine is expected to start on December 5, and will be followed by a ban on imports of oil products in February.

The Organization of the Petroleum Exporting Countries (OPEC) production fell in October for the first time since June. OPEC and its allies, including Russia, decided to reduce the target production level by two million barrels per day, starting in November.

The market is also expecting a rise in demand from China in the hope that Beijing will ease its policies to combat the Corona virus. Chinese officials pledged on Wednesday to keep growth a priority and pursue reforms.