Oil prices fall on prospects of US rate hike

Oil prices fell slightly on Wednesday, amid fears that the US Federal Reserve will raise interest rates again next week after an unexpected rise in consumer prices in August, dispelling support from a strong outlook for the Organization of the Petroleum Exporting Countries on the growth of oil demand.

Brent crude futures were down 17 cents, or 0.2 percent, at $93.00 a barrel by 0633 GMT. US West Texas Intermediate crude futures fell 11 cents, or 0.1 percent, to $87.20.

Prices came under pressure from unexpected US inflation data on Tuesday, dashing hopes that the Federal Reserve will ease its hawkish rate hike policy in the coming months.

Federal Reserve officials are scheduled to meet next Tuesday and Wednesday because inflation remains far from its target rate of two percent.

In China, the continuation of strict restrictions related to COVID-19 is reducing the demand for fuel in the world’s largest oil importer.

Prices received some support from OPEC’s affirmation of its continued expectations for global oil demand growth in 2022 and 2023, citing signs that major economies are performing better than expected despite adverse conditions such as high inflation.

OPEC said in a monthly report that oil demand will increase by 3.1 million barrels per day in 2022 and 2.7 million barrels per day in 2023, without changing its forecast from last month.