NEW YORK (Reuters) – A faster-than-anticipated rate hike by the Bank of England fueled concerns about the economy and fuel demand outstripping support from an unexpected drop in U.S. oil supplies, pushing oil futures on Thursday. fell more than 4%.
North Sea Brent futures fell $3.33, or 4.3%, to $73.79 a barrel as of 12:59 pm EDT. US West Texas Intermediate (WTI) crude futures fell $3.41, or 4.7%, to $69.12.
The indicator erases gains from a previous trade that saw U.S. corn and soybean prices soar to multi-month highs, and crop shortages could lower biofuel blends and boost oil demand. expectations have risen.
The Bank of England has raised interest rates by half a percentage point more than expected to combat stubborn inflation. The central bank has raised interest rates for the 13th time in a row.
Higher interest rates could slow economic growth and reduce oil demand.
Federal Reserve Chairman Jerome Powell has stepped up his guard, saying two more rate hikes of 25 basis points each before the end of the year are a “pretty good prospect”.
Stocks (.MIWD00000PUS), whose prices often fluctuate in tandem with crude oil, also fell.
On the supply side, U.S. crude oil inventories (USOILC=ECI) fell 3.8 million barrels last week to 463.3 million barrels, down from a 300,000 barrel increase by analysts polled by Reuters.
U.S. gasoline inventories (USOILG=ECI) rose by about 480,000 barrels in the week to 221.4 million barrels, according to the Energy Information Administration (EIA). Analysts polled by Reuters had expected an increase of 100,000 barrels.
EIA data showed distillate inventories (USOILD=ECI), which includes diesel and heating oil, rose by about 430,000 barrels in the week to 114.3 million barrels, compared with an expected increase of 700,000 barrels.
“Given the drop in crude oil and the very slight increase in inventories of refined products, we would have expected a better response from the market, but the crude and refined product markets are simply being weighed down by rising interest rates. said Andrew Lipow, president of Lipow Oil Associates in Houston.
Investors are now waiting for next week’s Chinese factory activity data, which could indicate the strength of the Chinese economy.
An executive at U.S. shale producer EOG Resources (EOG.N) said a modest increase in U.S. oil production and cuts by OPEC plus producers could push oil prices higher as supplies are constrained in the coming months. said to be sexual.
Reported by Stephanie Kelly. Additional Reporting: Shadia Nasralla and Jeslyn Lerh Editing: Conor Humphries, Mark Potter, David Gregorio
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