(LONDON) Oil prices continued to fall on Thursday as investors anticipate further interest rate hikes from the US and European central banks to combat inflation, which could weigh on growth and demand for crude oil. .
By 5:30 a.m. EST, a barrel of Brent North Sea oil for June delivery slid 1.89% to $81.55.
Its American equivalent, the barrel of West Texas Intermediate (WTI), for delivery in May, of which it is the last trading day, dropped 1.81%, to 77.73 dollars.
“ Oil is mired in the inflation stories of East and West ”, weighing on the prices of the two world crude benchmarks, comments Stephen Innes, analyst at SPI.
“Commodity investors have no choice but to hedge against the risk that central banks will continue to raise rates, slowing the economy and reducing demand for gasoline,” he explains.
In the United Kingdom, the level of inflation remained hovering above 10% in March, according to figures published on Wednesday.
Last week, ECB President Christine Lagarde warned that even if inflation in the euro zone should continue to fall in the coming months, there remained “considerable uncertainties”.
The market is thus anticipating “ a further rate hike from the Bank of England and the European Central Bank ”, according to Stephen Brennock of PVM Energy, inflation having remained “ at detrimental levels last month ”.
And across the Atlantic, investors are expecting several speeches by US central bank (Fed) officials on Thursday to better assess the path of rates, especially at the next monetary policy meeting in early May.
On Wednesday, Fed officials had already reiterated their commitment to controlling inflation, “ a new strong signal in favor of raising borrowing rates next month ”, according to Mr. Brennock.
Both Brent and WTI lost their gains linked to voluntary production cuts by some members of the Organization of the Petroleum Exporting Countries and their allies (OPEC), announced in early April, and which are due to start in May until the end of the year 2023.
Both crude benchmarks are down nearly 6% since closing last Friday.