By Arathy Somasekhar
HOUSTON (Reuters) – Oil prices fell 2% on Monday, extending losses as impending interest rate hikes by the world’s major central banks weighed on demand and Russian exports remained strong.
Investors expect the US Federal Reserve to raise rates by 25 basis points on Wednesday, followed the next day by half a point hikes by the Bank of England and the European Central Bank. Any deviation from this script would come as a shock.
“We’ve been seeing a ‘risk retreat’ sentiment over the last couple of weeks on thinking that higher interest rates could dampen demand more quickly,” said Dennis Kissler, senior vice president of trading at BOK Financial.
Brent futures for March delivery fell $1.76, or 2.03%, to settle at $84.90 a barrel. US Crude Oil (WTI) fell $1.78 to $77.90 a barrel, down 2.23% – its steepest decline in nearly four weeks.
The market was also pressured by indications of strong Russian supply, despite the EU ban and the G7 price cap imposed because of the invasion of Ukraine. Both oil benchmarks last week posted their first weekly loss in three.
In addition to the central bank meetings, a meeting on Wednesday of top ministers from the OPEC+ group, made up of the Organization of the Petroleum Exporting Countries (OPEC) and Russia-led allies, will also be in focus.
(Reporting by Alex Lawler; additional reporting by Swati Verma, Florence Tan and Emily Chow)
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Source:
Reuters