Oil stabilizes, affected by interest rate hike fears

Oil prices approached stability on Friday, as optimism about a possible increase in energy demand in China dashed and markets weighed on fears of rising inflation.

Brent crude futures fell 12 cents to trade at $92.26 a barrel by 0219 GMT. West Texas Intermediate crude futures fell four cents to $84.47 a barrel.

Brent crude is on track to record a weekly increase of 0.7 percent, while West Texas Intermediate crude is expected to decline 1.3 percent after extending contracts for the month of the nearest maturity.

Patrick Harker, Federal Reserve Chairman of Philadelphia, said that in order to combat inflation, the bank is trying to slow the economy and will continue to raise interest rates in the short term.

A Bloomberg report on Thursday, citing informed sources, said that China is considering reducing the quarantine period for visitors to seven from ten days. There was no official confirmation of the order from Beijing.

China, the world’s largest crude importer, has adhered to strict anti-Covid-19 rules this year, severely affecting businesses and economic activity and reduced demand for fuel.