Oil prices fell on Wednesday on concerns over fuel demand ahead of a US Federal Reserve meeting that is expected to see the central bank raise rates by at least 75 basis points to fight inflation.
Soaring inflation has led investors and oil traders to brace for a big move from the Federal Reserve this week in what could be the biggest U.S. interest rate hike in 28 years.
In its monthly report, the Organization of the Petroleum Exporting Countries (OPEC) stuck to its forecast that global oil demand will exceed pre-pandemic levels in 2022, but said the invasion of Ukraine by Russia, what Moscow calls actions a “special operation” and developments related to the coronavirus pandemic pose a considerable risk.
The producer group sees demand growth slowing next year, OPEC delegates and industry sources told Reuters, as soaring oil prices help drive up inflation and lower slow down the global economy.
Still, offering some price support is a tight bid, which has been made worse by a drop in Libya’s exports amid a political crisis that has hit production and ports.
First post: STI