Oil continued to slide on Friday, digesting the impact of the hike in interest rates and erasing the gains from earlier this week. The U.S. Federal Reserve hiked interest rates by 50 basis points earlier this week and expects further rate hikes next year. The Fed’s hawkish stance was also echoed by the Bank of England and the European Central Bank as these central banks also raised interest rates.
WTI crude oil finished the day down 2.39% and settled at $74.29.
WTI crude futures have fallen by approximately 12% in the past month. However, it is expected that demand from China, the biggest importer of oil in the world, could rise amid supply chain disruptions.
According to Reuters, citing data from International Energy Agency (IEA), Chinese oil demand growth could recover next year and climb up to 400,000 barrels per day (bpd). IEA has upped its forecast for oil demand in 2023 to 1.7 million bpd.
After a recent spate of optimism, natural gas fell 5.31% to $6.60. The Energy Select Sector SPDR ETF (XLE) has risen by 51.85% in the past year.
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