Oil prices fell Wednesday as investors await the release of minutes from the US Federal Reserve after recent data raised the risk of interest rates remaining high for longer, which could impact global economic growth and demand for crude.
Brent crude dipped 0.5% to $82.61 a barrel at 10:30 am GST Wednesday, while US West Texas Intermediate (WTI) crude rose 0.6% to $75.89 a barrel around the same time.
The price decline Wednesday is WTI’s drop on the sixth session. Crude oil prices had been volatile almost throughout the entire period of 2022 and the beginning of 2023.
Earlier this month, the Federal Reserve raised its target interest rate, but at a slower pace, and warned of more increases in the coming months to cool inflation, which 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.
Higher interest rates will strengthen the dollar, making dollar-denominated oil more expensive for holders of other currencies.
Last week, Goldman Sachs and the Bank of America said they expect the US central bank to raise interest rates three more times this year as recent data pointed to persistent inflation and a resilient labor market.
