Oil falls as focus remains on inflation fears

) – Oil prices fell more than $2 on Thursday as investors focused on the prospect of a significant US interest rate hike, which would curb rising inflation but at the same time hurt oil demand.

Brent crude futures for September fell $2.14 to $97.43 a barrel by 1038 GMT, after settling below $100 for the second straight session on Wednesday.

West Texas Intermediate crude futures for August delivery were traded at $93.78 a barrel, down $2.52.

Oil prices have fallen in the past two weeks on fears of recession, despite the decline in exports of crude and refined products from Russia due to Western sanctions in addition to the disruption of supplies from Libya.

The US Federal Reserve is expected to step up its efforts to tackle inflation to a 40-year high by raising interest rates by 100 basis points this month, after inflation data painted a bleak picture of accelerating price pressures.

Investors also bought the dollar, which is often seen as a safe haven. The dollar index hit a 20-year high on Wednesday, which makes it more expensive to buy oil for buyers outside the United States.

Concerns about the imposition of new restrictions related to the pandemic in many Chinese cities, with the aim of curbing the increase in cases infected with a new highly contagious variant, have also led to a reduction in oil prices.

Meanwhile, US President Joe Biden will visit Saudi Arabia on Friday, where he will attend a summit of allies in the Gulf and invite them to pump more oil.