Oil prices fall as investors worried about interest rates and demand

Oil prices tumbled nearly $2 a barrel on Thursday after another round of comments from Federal Reserve Chairman Jerome Powell fueled concerns that a hike in U.S. interest rates could slow growth. economic.

Brent crude closed at $110.05 a barrel, down $1.69, or 1.5%. US Crude Oil (WTI) closed at $104.27 a barrel, down $1.92, or 1.8%.

Powell said the Fed’s focus on containing inflation was “unconditional” and the job market was unsustainably strong, comments that stoked fears of further rate hikes.

In addition, high gasoline prices may be starting to dampen demand, said Robert Yawger, director of energy futures at Mizuho in New York.

“That definitely got into the conversation,” Yawger said, adding that he believes gasoline still has room to go up. US retail prices are currently averaging $4.94 a gallon, about 10 cents off the peak, according to the AAA Motorists’ Club.

OPEC and allied producing countries including Russia are likely to follow a plan of accelerated production increases in August in hopes of dampening oil prices and inflation as U.S. President Joe Biden plans to visit Saudi Arabia. , said sources.