HomeFinancial MarketsOil Falls Amid Growing Interest Rate Concerns

Oil Falls Amid Growing Interest Rate Concerns

Oil markets declined ahead of central bank meetings later this week during which the further tightening of monetary policy is expected to be discussed. West Texas Intermediate declined by about 1% to trade at $84 per bottle while the dollar continues to strengthen.

Earlier in the month, crude prices dropped to their lowest levels since January as central banks were set to meet to discuss more interest rate hikes. Oil prices were also previously affected due to the global oil demand for July slumping to 1.1 million barrels per day. According to Dennis Kissler, senior vice president of trading at BOK Financial, global demand will continue to decline should interest rate hikes persist.

“The Fed’s expected interest rate decision this week is rocking the energy sector. Ideas that continued rate increases will slow world crude demand and keep upward pressure on the US Dollar are triggering long liquidation in crude,” Kissler observed.

Recent price declines are doing little to minimize the ongoing energy crisis in Europe, with excessive energy costs threatening to pull the continent into recession. European governments are racing to stockpile their inventories ahead of the incoming winter while also cutting dependency on Russian energy supplies.

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