Oil prices rose Thursday after the US Federal Reserve raised interest rates by 25 basis points, and the Organization of the Petroleum Exporting Countries and its allies’ (OPEC+) decision to maintain its oil output targets.
Brent crude edged up 0.6% to $83.33 a barrel at 11:17 am GST Thursday, while US West Texas Intermediate (WTI) crude rose 0.6% to $74.90 a barrel around the same time.
Crude oil prices had been volatile almost throughout the entire period of 2022 and the beginning of 2023. Prices went up following China’s reopening earlier last month.
The Federal Reserve raised its target interest rate Wednesday, but at a slower pace, and warned of more increases in the coming months in order to cool inflation, which still remains elevated. Fed Chair Jerome Powell said at a press briefing that despite the economy’s disinflationary process already starting, it is still premature to declare victory against inflation.
To combat soaring prices brought about by the pandemic, supply chain disruptions, rising shipping costs, and bad weather, central banks across the globe have raised their key borrowing rates.
The US Federal Reserve raised interest rates by 0.25% on March 17, 2022 – its first increase since 2018. It also warned of more increases for the rest of 2022. In June, the Fed announced its biggest interest rate hike since 1994, raising the benchmark borrowing rate by 0.75%, a sign that the central bank was struggling to tame rising inflation. It made three more 0.75% rate hikes before slowing down to 0.5%, the last increase for 2022, which was announced on December 14. The Fed’s next interest rate announcement is slated for March 22.
The dollar fell 0.11% against the British pound and 0.14% against the euro at 11:20 am GST Thursday.
