WTI crude oil fell toward $89 per barrel on Thursday, easing from a three-week high hit in the previous session, as the US Federal Reserve signaled that interest rates could go higher than previously anticipated, keeping the pressure on global growth and demand.
The Fed raised its policy rate by 75 basis points in a widely expected move, though Fed Chair Jerome Powell said that rates have yet to be “sufficiently restrictive” even as a slower pace of increases could soon be appropriate.
The prospect of even higher interest rates as central banks struggle to bring down inflation has been weighing on the demand outlook, as it increases the risk of a global recession.
Still, investors remained cautious about a tightening supply outlook as reflected by a surprise decline in US crude inventories. OPEC+ is also expected to keep markets tight with sizable output cuts, while the European Union ban on Russian oil is set to take effect next month.