Oil market lost 4% in a day

Oil prices fell by 4% today. The general negative market sentiment associated with rising interest rates and fears of a recession is putting pressure on the oil market. 

And even positive data from the EIA on oil reserves in the United States could not change this trend. According to the weekly report, oil reserves in the country decreased by 3.8 million barrels last week, while an increase of 1.9 million barrels was expected. The overall supply level also decreased: oil production decreased by 200,000 barrels per day, and net crude oil imports decreased by 1.5 million barrels per day.

The current Brent oil quote is $72.95 per barrel. During the day, the price dropped to $72.12, which was the lowest value in the last 10 days. North American WTI oil shows similar dynamics: a decline to $68.42 from a daily low of $67.36 per barrel. 

Analysts note that the increase in interest rates is an important factor for the dynamics of the oil market. Yesterday, the Bank of England unexpectedly raised the key rate by 50 basis points, while the market expected a more moderate increase of 25 bps. The central bank of Turkey also sharply raised the key rate from 8.5% to 15%, turning its monetary policy 180 degrees.

The Swiss National Bank and the Central Bank of Norway also raised their rates. And the head of the US Federal Reserve Jerome Powell pointed to the priority of the fight against inflation and the prospect of further rate hikes this year.

These events increase tension in the markets due to the situation in the global economy, which leads to sales of oil, as it is the commodity most sensitive to business cycles. The growth of risks for the economy leads to a decrease in fuel consumption, and the supply on the market begins to exceed demand.