Oil prices fell by more than $3 on Wednesday as markets worried regarding a drop in demand following the US Federal Reserve raised interest rates by three-quarters of a percentage point.
Brent crude contracts for August delivery ended the trading session as low as $2.7, or 2.2 percent, to settle at $118.51 a barrel, following falling during the session to $117.75.
And US benchmark West Texas Intermediate crude contracts for July delivery fell $3.62, or 3.04 percent, to settle at $115.31 a barrel, following tumbling during the session to $114.60.
The largest increase in US interest rates since 1994 also sent the dollar to high levels, bringing its index to the highest level since 2002. The rise of the green currency would make oil priced in dollars more expensive for holders of other currencies, which reduces demand.
The US Energy Information Administration said on Wednesday that the stockpile of crude oil in the Strategic Petroleum Reserve of the United States recorded a record decline last week, and government agency data showed that crude stocks in the petroleum reserve fell by 7.7 million barrels during the week ending June 10 to 511.61 million. barrels, the lowest since January 1987.
The US Energy Information Administration said on Wednesday that US oil and distillate inventories rose last week, while gasoline stocks fell.
The government agency’s data showed that US refiners’ consumption of crude fell by 67,000 barrels per day last week, with refinery operating rates falling 0.5 percentage points, and Energy Information Administration data showed that US gasoline stocks fell by 700,000 barrels to 217.5 million barrels, while it was expected that Rise 1.1 million barrels, distillate stocks, which include diesel and heating oil, increased by 700,000 barrels to 109.7 million barrels, versus expectations for an increase of 300,000 barrels, and net US crude oil imports decreased over the past week by 662,000 barrels per day to 3.26 million barrels per day.
(Archyde.com)