Investors sold oil positions due to concerns that aggressive interest rate hikes to combat inflation will significantly slow economic activity and reduce oil demand.
Oil prices have fallen as markets fear that aggressive interest rate hikes to combat inflation will trigger an economic downturn, further reducing oil demand.
Brent crude was trading at $99.34 per barrel at 0610GMT (9.10 AM local time) on Wednesday, down 0.15 percent from the previous session’s close of $99.49 per barrel.
The American benchmark West Texas Intermediate (WTI) was trading at $95.78 per barrel at the same time on Wednesday, down 0.06 percent from the previous session’s close of $95.84.
Price downward pressure
Oil prices fell further as central banks increased interest rates aggressively to combat inflation, raising fears of a deeper global recession.
Fears of lower global oil demand put downward pressure on prices as central banks around the world raise interest rates to combat inflation, and the new Covid-19 pandemic forces Chinese cities to take drastic measures.
Market participants are keeping a close eye on US Vice President Joe Biden’s trip to the Middle East, where he is expected to press Saudi Arabia and other Gulf producers to increase their oil supply to support price stability.