The US Federal Reserve’s decision is expected to be followed by moves by other central banks in Europe and Asia, which are also expected to raise funding costs.
Charu Chanana, a market analyst at Saxo Capital Markets Pte in Singapore, told Bloomberg: “If the Fed were to make a surprise rate hike today, it could mean a further drop in oil prices.”
“In the medium term, oil demand is expected to remain strong as the harsh European winter could mean a further shift from gas to oil, while tensions between Russia and Ukraine are also escalating,” he added.
UBS commodities analyst Giovanni Stonovo told Reuters that the oil market is currently stuck between downside fears and bullish hopes, as concerns are driven by monetary tightening in the US and Europe, which increases the possibility of a recession and this could affect the outlook for oil demand. “
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