Oil declines further on economic recession worries due to Fed rate hike

25 Jul 2022 , 09:23 AM

On Monday, oil prices declined, erasing previous gains but extending a recent losing streak, on worries that the world’s largest oil consumer, the United States, may see a slowdown in the growth of fuel demand due to an anticipated rise in interest rates.

Brent oil futures for September settlement were down a further 48 cents, or 0.5 %, at $102.72 a barrel at 02:05 GMT. West Texas Intermediate (WTI) oil futures in the United States for September delivery decreased by 65 cents or 0.7 percent to $94.05 a barrel, falling for a fourth straight day.

Recent weeks have seen volatility in oil futures as traders attempt to balance the likelihood of additional interest rate increases that could constrain economic activity and thereby slow the growth in fuel demand with the limited supply resulting from disruptions in the trading of Russian barrels due to Western sanctions during the Ukraine conflict.

At its meeting on July 26—27, the U.S. Federal Reserve is expected to increase interest rates by 75 basis points, according to officials at the institution.