Oil prices fell over 1% on Thursday, deepening steep losses in recent days, after the U.S. Federal Reserve increased interest rates and investors worried about a weakening global economy that could dent energy demand.
Brent futures fell 76 cents, or 1.1%, to $71.57 a barrel by 0002 GMT. The global benchmark on Wednesday posted its lowest settle since December 2021.
U.S. West Texas Intermediate crude (WTI) fell $1, or 1.5%, to $67.60 a barrel. WTI in early trading on Thursday fell to a session low of $63.64 a barrel, the lowest since December 2021.
Both Brent and WTI have fallen over 10% since the start of this week.
On Wednesday afternoon, the Fed raised interest rates by a quarter of a percentage point. The move weighed on oil prices, as higher rates could slow economic growth and hit energy consumption.
But the Fed also signaled it may pause further increases, giving officials time to assess fallout from recent bank failures, wait for resolution of a political standoff over the U.S. debt ceiling and monitor inflation.
Banking sector concerns have been prevalent, after U.S. regulators on Monday seized First Republic, the third major U.S. institution to fail in two months, with JPMorgan Chase & Co agreeing to take $173 billion of the bank’s loans, $30 billion of securities and $92 billion of deposits.
Investors awaited developments from the European Central Bank, which is set to raise interest rates for the seventh meeting in a row on Thursday as its long fight against stubborn inflation continues. The size of the move still is open to debate.
The ECB will announce its policy decision at 1215 GMT and Lagarde will hold a press conference at 1245 GMT.