# Oil dips as potential Fed rate hike overshadows falling stocks Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-04-19 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Oil dips as Fed rate hike looms over falling stocks Meta Description: Oil prices drop on potential Fed interest rate hikes that may dampen growth and consumption, despite falling inventories and strong Chinese data. URL: https://financedigest.com/oil-dips-as-potential-fed-rate-hike-overshadows-falling-stockshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-04-19t003430z1lynxmpej3i00drtroptp4global-oil-kemp-1736814125589-compressed.jpg) # Oil dips as potential Fed rate hike overshadows falling stocks By Laila Kearney and Muyu Xu (Reuters) -Oil dropped on Wednesday as the market weighed potential interest rate hikes from the U.S. Federal Reserve that could [slow growth and dampen oil](https://www.financedigest.com/bp-makes-record-profit-in-2022-slows-shift-from-oil.html "BP makes record profit in 2022, slows shift from oil") consumption, offsetting falling U.S. inventories and strong [Chinese economic data](https://www.financedigest.com/oil-eases-on-lackluster-chinese-import-data-u-s-economy-woes.html "Oil eases on lackluster Chinese import data, U.S. economy woes"). Brent crude futures shed 35 cents, or 0.4%, to $84.42 a barrel as at 0641 GMT. West Texas Intermediate U.S. crude fell 33 cents, also 0.4%, to $80.53 a barrel. The U.S. central [bank likely has one more interest rate rise](https://www.financedigest.com/the-rise-of-the-specialist-bank.html "The rise of the specialist bank") in store to fight inflation, Atlanta Fed President Raphael Bostic said on Tuesday. [Markets are pricing in an 86% chance the Fed raises rates](https://www.financedigest.com/the-feds-rate-hike-that-wasnt-and-brexit-a-snapshot-of-global-financial-markets.html "The Fed’s rate hike that wasn’t and Brexit: a snapshot of global financial markets") by 25 basis points at its May policy meeting. In Europe, [European Central Bank](https://www.financedigest.com/token-inc-launches-london-office-to-answer-demand-from-european-banks.html "Token, Inc. Launches London Office to Answer Demand from European Banks") officials are also wary of inflation and suggesting interest rates must keep rising. [Oil prices](https://www.financedigest.com/eu-sees-more-work-ahead-to-implement-russian-oil-price-cap.html "EU sees more work ahead to implement Russian oil price cap") received a lift from an industry report showing U.S. crude [stocks fell about 2.68 million barrels in the week ended](https://www.financedigest.com/global-stocks-trade-higher-at-the-end-of-a-volatile-month.html "Global stocks trade higher at the end of a volatile month") April 14, market participants citing American Petroleum Institute figures said on Tuesday. \[API/S\] Inventories of gasoline and distillate also fell last week, the people said. The official inventory [report by the Energy](https://www.financedigest.com/european-governments-spend-half-a-trillion-euros-on-energy-crisis-report.html "European governments spend half a trillion euros on energy crisis – report") Information Administration, the statistical arm of the U.S. Department of Energy, is due to be released at 1430 GMT on Wednesday. Meanwhile, the economy of top [crude oil importer China](https://www.financedigest.com/oil-rises-on-strong-crude-demand-despite-china-fears.html "Oil rises on strong crude demand, despite China fears") grew by a faster-than-expected 4.5% in the first quarter, while the country’s oil refinery throughput rose to record levels in March, data showed. The [market has been impatient on the impact China’s reopening has had on demand](https://www.financedigest.com/growth-of-construction-industry-is-creating-demand-for-screw-washer-market.html "Growth Of Construction Industry Is Creating Demand For Screw Washer Market"). The fact that its economy is growing at its fastest pace in a [year should bode well for demand in coming](https://www.financedigest.com/mild-sourness-products-is-expected-to-fuel-growth-of-sour-sugar-market-in-coming-years.html "Mild Sourness Products Is Expected To Fuel Growth Of Sour Sugar Market In Coming Years") months,” ANZ Research analysts Brian Martin and Daniel Hynes said in a client note. However, this is being offset by weakness elsewhere,” they said, referring to [plunging refining](https://www.financedigest.com/home-prices-are-setting-records-while-mortgage-rates-plunge-is-it-time-to-refinance.html "Home Prices Are Setting Records While Mortgage Rates Plunge – Is It Time To Refinance?") margins for diesel and jet fuel that indicate global demand is softening. Distillates and gasoline cracks from Asia to Europe are weak amidst sluggish demand and increasing [product supplies in the market](https://www.financedigest.com/automotive-chrome-trim-products-market-industry-analysis-and-detailed-profiles-of-top-industry-players.html "Automotive Chrome Trim Products Market: Industry Analysis and Detailed Profiles of top Industry Players"). Adding more pressure on [oil benchmarks is Asian refiners continuing to seize Russian](https://www.financedigest.com/g7-finance-chiefs-agree-on-russian-oil-price-cap-but-level-not-yet-set.html "G7 finance chiefs agree on Russian oil price cap but level not yet set") crude in April. India and China have snapped up the vast majority of Russian oil so far in April at prices above the Western [price cap](https://www.financedigest.com/eu-meets-to-try-to-break-gas-price-cap-impasse.html "EU meets to try to break gas price cap impasse") of $60 per barrel, according to traders and Reuters calculations. (Reporting by Laila Kearney in New York and Muyu Xu in Singapore; Editing by Michael Perry and Christopher Cushing) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---