ALBAWABA – Oil prices for future contracts slipped 6 percent on Thursday on expectations of another interest rate hike in the United State (US) and strong US oil inventory data, Reuters reported.
So far, preliminary figures showed a decline in US oil stocks.
In a preliminary indicator, industry data showed US crude oil inventories fell by about 1.2 million barrels last week, defying forecasts for a build of 300,000 barrels.
But Reuters’s experts expect the data to come out higher than initially anticipated.
Brent futures eased by $0.47 cents, to $76.65 a barrel at 8:40 GMT and West Texas Intermediate (WTI) crude futures were down $0.44 cents, at $72.09, according to Reuters.
US corn and soybean prices rose seasonal highs, Thursday, fuelling concerns over a crops shortfall, which would lower biofuels blending and drive oil demand, the news agency reported.
Notably, higher demand leads to higher prices.
However, the market was cautious after US Federal Reserve Chair Jerome Powell said he expects two more interest rate hikes, of 25 basis points each, by the end of the year. He specifically said it was “a pretty good guess”, as reported by Reuters.
The Bank of England is also expected to raise rates for a 13th time on Thursday. Especially after the recent shocking May inflation data.
