Oil prices drop ahead of the expected rise in US interest rates

At around 6:10 pm CEST, the price of North Sea Brent crude was losing more than two percent and was trading at $ 90.15 a barrel. US WTI crude fell 2.4% to $ 83.71 a barrel at the same time.

The Fed is likely to raise its benchmark interest rate by 0.75 percentage points on Wednesday, following its two-day meeting, to slow inflation. This expectation has a negative impact on stocks, the movement of which usually coincides with the movement of oil prices. Higher rates also strengthen the dollar, making oil more expensive for investors outside the United States.

“The oil market is torn between fears of decline and hopes for growth. Concerns are fueled by the aggressive tightening of monetary policy in the United States and Europe, which increases the likelihood of a recession and could impact the outlook for demand for oil. oil, “said UBS analyst Giovanni Staunovo.

Both Brent and WTI are on track for the worst quarterly percentage drop since the covid-19 pandemic has started. In March, however, Brent rose to around $ 139, the highest since 2008.

A document from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia, shows that the group missed the production target of 3.583 million barrels per day in August. This represents about 3.5% of global demand, Reuters reported.

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