Oil falls as traders wait for looming central bank rate hikes

Oil fell ahead of several global interest-rate decisions that are expected to see further monetary tightening.

The Fed and other central banks from Europe to Asia are expected to deliver interest-rate hikes this week as they seek to tame rampant inflation that’s hit demand. Liquidity thinned, leading to volatile price swings, while a stronger dollar has added to headwinds. Brent crude futures dropped to trade near US$91 a barrel alongside declining equity markets.

“Macro-economic pressures from the Federal Reserve set to raise interest rates this week has added pressure back on the US stock market which seems to be capping crude prices,” said Dennis Kissler, senior vice president at Bok Financial Securities. “Near term, prices are vulnerable to the Fed’s rate rises and more Strategic Petroleum Reserve releases scheduled through November.”