Oil falls as focus remains on inflation fears

Oil prices fell on Thursday as investors doubled down on bets that the US central bank would raise interest rates, which would control inflation and curb oil demand.

Brent crude futures for September were down 20 cents, or 0.2 percent, at $99.37 a barrel by 0010 GMT, having gained nine cents on Wednesday.

West Texas Intermediate crude futures for August delivery were traded at $95.93 a barrel, down 37 cents, or 0.4 percent, after an increase of 46 cents in the previous session.

The US Federal Reserve is ramping up its fight against inflation that has hit a 40-year high with an unexpected 100 basis point interest rate hike this month after a disappointing inflation report showed price pressures were accelerating.

On Wednesday, the Bank of Canada raised the benchmark interest rate by 100 basis points in order to control inflation to surprise the markets and Canada became the first country in the Group of Seven to raise interest rates by such a large amount in the course of the economic cycle.

Citing draft forecasts, Bloomberg reported on Wednesday that the European Commission expects record-high inflation and cut its GDP forecasts for 2022 and 2023 due to the war in Ukraine, lower demand due to higher prices and the risks of winter energy shortages.

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.