Oil fell for the second straight day as markets came to grips with the prospect that the Fed will continue aggressive rate increases, hampering US demand.
(Bloomberg) — Oil fell for the second straight day as markets came to grips with the prospect that the Fed will continue aggressive rate increases, hampering US demand.
The Fed’s openness to a half-point hike at its next meeting adds to this week’s bearish drumbeat, which included China forecasting weaker-than-expected economic growth and an industry group projecting that oil-product stockpiles will rise. West Texas Intermediate’s decline on Tuesday was the biggest drop since early January and snapped five straight days of gains.
“Macro headwinds once again stifle a rally,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. “Many traders have seen this movie before and are not buying the dip until the macro environment stabilizes and the physical market fundamentals are resoundingly bullish.”
Before the Powell-driven selloff, oil had been trading at the highest prices since late January.
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