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Crude oil futures closed lower on Wednesday (Sept. 21) after the Federal Reserve (Fed) raised interest rates by 0.75%, raising concerns among investors that this would hurt the economy and oil demand.
- WTI crude futures fell $1, or 1.2%, at $82.94 a barrel.
- BRENT crude futures were down 79 cents, or 0.9%, at $89.83 a barrel.
Initially, crude oil futures rose on reports that Russian President Vladimir Putin announced the mobilization of 300,000 troops to escalate the war with Ukraine.
However, oil contracts weakened later. The Fed raised interest rates by a further 0.75% at its meeting yesterday and confirmed that it will continue to raise rates until 2023.
The Fed forecasts the U.S. economy to grow just 0.2% by year-end and 1.2% in 2023, weighing on risky asset markets, including stocks and oil.
Oil markets were also pressured by an EIA report that U.S. crude oil inventories rose by 1.1 million barrels last week, the third straight week of increases, and in Cushing Oklahoma, which has the largest U.S. crude oil inventories. U.S. crude oil futures rose 400,000 barrels.
Gasoline stocks increased by 1.6 million barrels, as did refined oil stocks, including fuel oil and diesel, which increased by 1.2 million barrels.
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Thursday, September 22, 2022