Oil fell on Thursday as rising US interest rates pushed the dollar higher and raised fears of a global recession that would reduce fuel demand, but losses were capped by concerns about tight supply.
Brent crude was down $1.19, or 1.2%, at $94.97 a barrel by 11:35 GMT, while U.S. West Texas Intermediate (WTI) crude futures were down $1.19. 1.31, or 1.5%, to $88.69.
Both benchmarks had gained more than $1 on Wednesday, helped by another drop in US oil inventories, even as the US Federal Reserve raised interest rates by 75 basis points and Chairman Jerome Powell said it was premature. consider a pause in rate hikes.
That sent the dollar higher on Thursday as Powell indicated that US interest rates are likely to peak above current investor expectations.
A strong dollar reduces demand for oil by making it more expensive for buyers using other currencies. However, losses were capped by expectations that the oil market will tighten in the coming months.
The European Union’s embargo on Russian oil over its invasion of Ukraine will begin on December 5 and will be followed by a halt to imports of oil products in February.
Lower output from the Organization of the Petroleum Exporting Countries (OPEC) also helped support prices, as output from the group of producers fell in October for the first time since June, according to a Reuters study.
OPEC pumped 29.71 million barrels per day (bpd) last month, according to the survey, down 20,000 bpd from September, which was the highest output since April 2020. The group produced 1, 36 million bpd short of targets for October.
With information from Reuters
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