Oil extends losses on lingering US Fed rate hike fears

By Sibel Morrow

ANKARA (AA) - Oil prices fell further on Wednesday over fears that further interest rate hikes in the US would dampen oil demand in the world’s largest oil consumer, while investors await US crude oil stock data due on Thursday.

International benchmark Brent crude traded at $82.67 per barrel at 9.56 a.m. local time (0656 GMT), down 0.45% from the closing price of $83.05 a barrel in the previous trading session.

At the same time, American benchmark West Texas Intermediate (WTI) traded at $75.95 per barrel, a 0.54% decrease after the previous session closed at $76.36 a barrel.

Prices extended losses over fears that the US Federal Reserve (Fed), along with central banks in Switzerland, Australia, Canada, India and Indonesia would continue to raise interest rates in the face of persistent underlying inflationary pressures.

However, according to a statement by Fitch Ratings on Tuesday, headline CPI inflation rates have started to show signs of cooling in recent months in many economies.

The US Fed will release the minutes of its monetary policy during a meeting of the members of the Federal Open Market Committee (FOMC) on Wednesday.

The US central bank is widely expected to signal further interest rate rises at the conclusion of its two-day meeting, having made a total of 425-point rate hikes on seven occasions last year to lower record-high inflation.

Meanwhile, investors are also focusing on the release of US crude oil inventory data, which will provide further insight into the oil demand outlook in the country.

The US Energy Information Administration (EIA) will release official oil stock data on Thursday, and if stocks continue increasing like last week, prices are expected to fall further.