Oil sank 2%, interest rate worries deepen

Oil prices dropped on Monday, 17 April 2023 as the US dollar solidified and a possible May interest rate hike which could falter the economic recovering momentum. Brent crude futures descended $1.55 or 1.8%, to settle at $84.76/barrel while West Texas Intermediate crude dipped $1.69 or 2.1% to $80.83/barrel.

As the dollar index gained around 0.6%, dollar-centric oil has become more expensive for international investors. Traders speculate the Federal Reserve will raise the key interest rate in May by another 0.25% to curb the stubbornly high inflation.

China’s first-quarter GDP is expected to be good news for commodity prices and the IEA is predicting it will be responsible for driving the 2023 demand growth. However, OPEC+ production halts could be detrimental to consumers and the global economy during the second half of the year.