Oil prices fall as banks signal further interest rate hikes

By Zeynep Beyza Kilic

ANKARA (AA) - Oil prices declined on Friday with concern of an economic slowdown caused by interest rate hikes of central banks.

International benchmark Brent crude traded at $73.58 per barrel at 09.40 a.m. local time (0640 GMT), a 0.76% loss from the closing price of $74.14 a barrel in the previous trading session on Friday.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $68.67 per barrel, down 1.21% from the previous session's close of $69.51 per barrel.

Central banks raised interest rates this week and hinted at further hikes for the remainder of the year.

The Bank of England raised the policy rate by 50 basis points to 5%, while the Swiss National Bank increased its policy rate by 25 basis points to 1.75%. The Norwegian Central Bank raised the policy rate by 50 basis points to 3.75%.

US Federal Reserve Chairman Jerome Powell said the Federal Open Market Committee agreed that 2 more rate hikes could be necessary.

Concerns of a slowdown in economic growth and a decline in oil demand put downward pressure on oil prices.

Also, the rise of the dollar against other currencies pushed oil prices lower. The US dollar index, which measures the value of the US dollar against other currencies, rose 0.31% to 102.315 earlier in the day. The strong dollar is expected to reduce demand by making oil more expensive for other currency users.

Meanwhile, US Energy Information Administration announced that crude oil inventories in the country fell by 3.8 million barrels last week. The expectation was for inventories to decline by 1.2 million barrels. Data implying a rise in oil demand in the world's largest oil consumer limited the decline in prices.