The Western Texas Intermediate (WTI) crude oil benchmark has experienced a volatile week of trading, with prices fluctuating on fears of economic uncertainty and further rate hikes. Despite a 3% increase in prices on Friday, WTI remains at risk of ending the week with a 7% decline, currently trading at $70.96 per barrel after hitting a low of $68.54.
Fear of Rate Hikes Impacts Crude Oil Prices
WTI prices have been impacted by fears of further rate hikes by the US Federal Reserve. As the economy continues to recover from the pandemic, investors are concerned that the Fed will raise interest rates in order to curb inflation. This would lead to a stronger dollar, making crude oil more expensive for buyers who use other currencies. As a result, crude oil prices have experienced significant fluctuations this week, with WTI dropping by 2.8% on Thursday due to the possibility of higher interest rates.
Global Economic Slowdown Adds to Uncertainty
In addition to concerns over interest rates, the global economic slowdown has also impacted crude oil prices. The spread of the Omicron variant and the subsequent increase in COVID-19 cases have led to renewed restrictions and reduced economic activity. This has had a significant impact on the demand for crude oil, leading to further price fluctuations.
Conclusion
In conclusion, the WTI crude oil benchmark has experienced a volatile week of trading, with prices fluctuating on fears of economic uncertainty and further rate hikes. While prices have risen by 3% on Friday, WTI remains at risk of ending the week with a 7% decline. Concerns over the global economic slowdown and the possibility of further interest rate hikes by the US Federal Reserve have led to significant fluctuations in crude oil prices. As the situation continues to evolve, it remains to be seen how WTI prices will be impacted in the long term.
