Oil prices fell about 1% to the lowest level in 3 weeks as a result of the rise of the dollar and after the Federal Reserve (the US central bank) kept interest rates unchanged as expected.
Raising interest rates may slow economic growth and reduce demand for oil, while the rise in the dollar increases the cost of purchasing fuel in other currencies, putting pressure on prices.
Brent crude futures fell 0.5% and reached $84.63 per barrel at settlement.
US West Texas Intermediate crude also fell 0.7% to $80.44 at settlement.
This is the lowest settlement for Brent since last October 6, and for West Texas Intermediate crude since last August 28.
Trading activity was volatile, with both benchmarks rising more than $2 a barrel early due to concerns about the conflict in the Middle East.
The Federal Reserve kept interest rates steady but left the door open for further increases due to the strength of the US economy. The lifting process began in March 2022.
The dollar rose to its highest level in 4 weeks against a basket of other currencies.
Crude oil futures were also under pressure due to the increase in US crude and gasoline stocks last week after refineries undergoing seasonal maintenance resumed operating their units more slowly than expected to avoid increasing gasoline stocks.
In Europe, inflation in the euro zone reached its lowest level in two years last October, falling to 2.9% compared to 4.3% recorded in September, according to a preliminary reading of the European Union Statistics Office (Eurostat), which led to expectations that ruled out a central increase. European interest rates coming soon. The Bank of England will meet tomorrow, Thursday.
In China – the world’s largest oil importer – a survey showed that factory activity unexpectedly contracted last October, which reinforces the pessimistic official figures issued the previous day.
