Oil drops as more rate hikes overshadow tightening fuel market
BNN Bloomberg
Oil fell after Federal Reserve Chair Jerome Powell said interest rates will go higher than earlier projected, overshadowing tightening supply.
West Texas Intermediate futures dropped below US$89 a barrel after rising four per cent over the previous two sessions. Powell said it's “very premature to be thinking about pausing” after the Fed hiked rates again by 75 basis points. The dollar jumped, making commodities priced in the currency less attractive.
Major central banks are seeking to tame rampant inflation, which is weighing on energy demand. Bearish sentiment stemming from the rate hikes has offset a tightening fuel market, with US gasoline stockpiles falling to the smallest since 2014 and distillate supplies on the East Coast around record seasonal lows.
