Oil prices fall after US interest rate hike

Oil prices fell in early Asian trade today after the Federal Reserve (the US central bank) raised interest rates significantly to control inflation, as concerns related to the global economy cast a shadow on future fuel demand.

Brent crude futures fell 16 cents, or 0.2 percent, to $89.67 a barrel, while West Texas Intermediate crude futures fell 15 cents to $82.79 a barrel.

The US central bank raised interest rates by 75 basis points on Wednesday for the third time this year, to a range between 3.00 and 3.25 percent, and signaled further rate hikes.

Risky assets such as stocks fell after the news, as did oil, while the dollar jumped to a twenty-year high against a basket of currencies, which made crude oil more expensive for buyers who do not use the US currency.

At the same time, the US Energy Information Administration said yesterday that the demand for gasoline in the United States over the past four weeks fell to 8.5 million barrels per day, the lowest level since February.

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