Oil drops on Fed rate hike, lower demand

By Zeynep Beyza Kilic

ANKARA (AA) - Oil prices retreated as US interest rates increased and the dollar strengthened amid growing recessionary concerns.

International benchmark Brent crude traded at $95.29 per barrel at 10.22 a.m. local time (0722 GMT) for a 0.90% decrease from the closing price of $96.16 a barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI) traded at $89.03 per barrel at the same time for a 1.08 % loss after the previous session closed at $90 a barrel.

The US Fed increased interest rates by 75 basis points for the fourth consecutive time to the highest level in 14 years on Wednesday in the range of 3.75-4.00%.

Fed chairman Jerome Powell said it was too early to consider a pause in interest rate hikes and that the final level of interest rates could be higher than expected.

By making oil more expensive for customers using foreign currencies, a stronger dollar is reducing demand appetite and driving down oil prices.

Meanwhile, US commercial crude oil inventories withdrew by 3.1 million barrels to 436.8 million barrels during the week ending Oct. 28, according to Energy Information Administration.

The market expectation was for a decrease of around 6 million barrels.