WTI retreats again ahead of the Fed’s rate decision

WTI crude oil was under more pressure on Tuesday ahead of the decision by FOMC meeting that has already started on Tuesday.

Traders are in anticipation of another rate hike of US interest rates to encounter high inflation. WTI was down by some 0.9% trading around $84.25 having fallen from a high of $86.10 and reaching a low of $83.04 on the day.

Market sentiment surrounding surging inflation and tighter monetary policy continues to impact oil price while the US dollar index DXY trades around 110.20, not far from a 20-year high of 110.79 hit in trade of September 7.

Risk aversion is supporting the higher US dollar in the face of the aggressive tightening path that global banks are on as they try to contain uncomfortably high inflation, weighing on demand for the black gold.

Biden Administration’s announced the release a further 10 million barrels from US strategic reserves in November and a China push to export more refined products has likely been a factor in the price drop in oil.