Oil down from potential US interest rate hike, weak economic growth rates

By Zeynep Beyza Kilic

ANKARA (AA) - Oil prices fell on Friday from the possibility of US interest rate hikes, making oil more expensive and warding off investors, and with a weaker economic growth rate in China from the COVID-19 lockdown.

International benchmark Brent crude cost $107.16 per barrel at 0605 GMT for a 1.08% decrease after closing the previous session at $108.33 a barrel.

American benchmark West Texas Intermediate (WTI) traded at $102.59 per barrel at the same time for a 1.16% drop after the previous session closed at $103.79 a barrel.

A half-point interest rate hike will be on the agenda for the meeting of the Federal Reserve in May to get inflation down to its 2% goal, Federal Reserve Chair Jerome Powell said at an International Monetary Fund panel on Thursday.

A higher interest rate means a higher US dollar rate, making oil more expensive for buyers holding other currencies.

Meanwhile, China's Central Bank Governor, Yi Gang, said China, the world's second-largest economy, is "not immune to external shocks" on Friday, as the spread of COVID-19 has put more downward pressure on the domestic economy.

The country is under a three-week lockdown due to recent high case numbers.

Oil prices have been on an upward trajectory with the possibility of an EU ban on Russian oil and gas, while Libyan production cuts last week raised shortage concerns.