• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Russia Says Europe Will Struggle To Replace Its Oil Products
  • 1 min GREEN NEW DEAL = BLIZZARD OF LIES
  • 10 hours Reality catching up with EV forecasts
  • 6 days "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 18 hours 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 6 days A Somewhat Realistic View of the Near Future for Electric Vehicles Worldwide
  • 12 days The Federal Reserve and Money...Aspects which are not widely known
Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Oil Prices Plunge 4% As Market Braces For Oversized Interest Rate Hike

  • Oil prices have fallen by 4% this morning.
  • Markets are bracing for a potential supersized interest rate hike.
  • On top of the expected large rate hike, oil prices were weighed down on Thursday by Wednesday’s EIA weekly inventory report. 

Oil prices plunged early on Thursday amid expectations of a large Fed rate hike at the end of the month and signs of weakening U.S. gasoline demand as prices remain elevated.

As of 10:46 a.m. ET on Thursday, WTI Crude was down by 4.61% at $91.64, and Brent Crude traded down 3.53% at $95.67, for a third consecutive day of losses.

The higher-than-expected U.S. inflation data for June and crude and gasoline builds, both reported on Wednesday, weighed on market sentiment and prices on Thursday.

ADVERTISEMENT

The U.S. Bureau of Labor Statistics announced on Wednesday consumer prices for June 2022, saying that over the last 12 months, the all items index jumped by 9.1 percent—the fastest consumer price increase since November 1981.

The figure was above expectations and prompted intensified market speculation that the Fed, which meets on July 26-27, could opt for another major rate hike to curb inflation after raising the key interest rate by 75 basis points in early June. The latest rise in June resulted in market sell-offs as traders and speculators started fretting that the aggressive rate hikes would lead to a recession.

ADVERTISEMENT

At this month’s meeting, the Fed could even decide on a supersized rate hike of 100 basis points, with traders pricing in a nearly 80% probability of a full percentage-point rise, Reuters notes, citing an analysis of the contracts by CME Group.

On top of the expected large rate hike, oil prices were weighed down on Thursday by Wednesday’s EIA weekly inventory report, which showed crude and gasoline builds for the week to July 8.

“The large build in gasoline inventories was driven by a steep decline in implied demand over the week, which fell by 1.35MMbbls/d. This resulted in implied gasoline demand averaging 8.06MMbbls/d, which is the lowest level seen for this stage of the year in at least a decade,” Warren Patterson, Head of Commodities Strategy at ING, said on Thursday.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage


ADVERTISEMENT


ADVERTISEMENT



Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News