Crude oil closes with a minus on worries about global demand

WTI closed at a one-year low on Tuesday (Dec. 6), while Brent crude slipped below $80 as investors worried about global economic uncertainty. This includes the impact of an interest rate hike by the U.S. Federal Reserve (Fed) to curb inflation.

  • WTI crude futures dropped $2.68, or 3.5%, to settle at $74.25 a barrel.
  • BRENT crude futures fell $3.33, or 4%, to close at $79.35 a barrel.

WTI crude oil futures closed more than 1% lower for the third consecutive day amid global economic uncertainty. China’s Purchasing Managers’ Index (PMI) fell to a six-month low, while economic growth in Europe slowed due to rising energy costs and interest rates.

In addition, investors are concerned that the U.S. Federal Reserve’s (Fed) accelerated rate hikes to curb inflation will push the global economy into recession and hurt oil demand.

Investors expect the U.S. Federal Reserve to raise interest rates above 5.0% in the middle of next year after releasing a strong jobs report.

Previously, the Fed had raised interest rates by 0.75% four times in a row. What this suggests is that the Fed’s tightening of monetary policy in the past has not been able to dampen the heat on the labor market. Consequently, this has led to the expectation that the Fed will continue to raise interest rates next year in order to slow down the economy and prevent a surge in inflation.

The CME Group’s FedWatch tool indicates that investors now expect the Fed to raise rates to a range of 5.00-5.25% in May 2023. Having previously predicted a level of 4.75-5.00%.

Investors are waiting for the weekly crude oil inventory figures released today by the U.S. Energy Information Administration (EIA).

The Spot Market is Open

Wednesday, December 7, 2022

Updated at


Crude Oil




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