Indications by US Federal Reserve Chairman Jerome Powell of possible major interest rate hikes pushed prices well into the red in the afternoon (CET). Most recently, a barrel (159 liters) of North Sea Brent for delivery in May cost 84.15 US dollars. That was $2.03 less than the day before. The price of a barrel of American grade West Texas Intermediate (WTI) for April delivery fell by $2.18 to $78.28.
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In the afternoon, the chairman of the US Federal Reserve announced a faster pace of interest rate hikes. “Recent economic data has been better than expected, so the rate peak is likely to be higher than previously thought,” Powell told the US Senate Banking Committee on Tuesday. “If the body of data suggests that faster tightening is warranted, we would be willing to increase the pace of rate hikes.”
The prospect of interest rates rising more quickly is dampening economic expectations on the financial markets and thus speculation about higher demand for crude oil. In addition, the prospect of higher interest rates in the USA gave the American dollar a boost. Because crude oil is traded in dollars on the world market, a rising dollar rate makes the commodity more expensive, which slows down demand.
As a result, the upward trend in oil prices of the past few trading days has not continued. Market observers also justified the price pressure on the oil market with disappointing economic data from China, which increased concerns about falling demand in the world’s second largest economy. In the morning it became known that China’s foreign trade had slumped further at the beginning of the year. As the customs administration in Beijing announced, exports fell significantly in January and February. Chinese imports also fell unexpectedly.
NEW YORK/LONDON (dpa-AFX)
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