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THE GIST
NEWS AND FEATURES
Global Philippines Fine Living
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INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
WEBINARS
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
DOWNLOADS
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Economic Updates
Philippines Trade Update: Trade deficit narrows but not a sign of strength
August 29, 2025 DOWNLOAD
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Economic Updates
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August 28, 2025 DOWNLOAD
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Markets 3 MIN READ

Oil falls 4%, extending losses after Fed rate hike

May 3, 2023By Reuters
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NEW YORK, May 3 (Reuters) – Oil prices fell 4% on Wednesday, extending steep losses from the previous session after the US Federal Reserve raised interest rates and as investors fretted about the economy.

Brent futures settled USD 2.99 lower, or 4%, to USD 72.33 a barrel, the global benchmark’s lowest close since December 2021. Brent hit a session low of USD 71.70 a barrel, its lowest since March 20.

US West Texas Intermediate crude (WTI) fell USD 3.06, or 4.3%, to USD 68.60. WTI’s session low was USD 67.95 a barrel, the lowest since March 24.

A day earlier, both benchmarks fell 5%, their biggest daily percentage declines since early January.

On Wednesday afternoon, the Fed raised interest rates by a quarter of a percentage point, pressuring oil prices as traders worried that slower economic growth could hit energy demand.

But the Fed also signaled it may pause further increases, giving officials time to assess the fallout from recent bank failures, wait for the resolution of a political standoff over the US debt ceiling, and monitor inflation.

Banking sector concerns returned to the spotlight on Monday after US regulators seized First Republic, the third major US institution to fail in two months, with JPMorgan Chase & Co (JPM) agreeing to take USD 173 billion of the bank’s loans, USD 30 billion of securities and USD 92 billion of deposits.

“The Fed going into a pause mode should be very supportive for the price of oil,” said Phil Flynn, an analyst at Price Futures Group. “The big question is whether or not we’re going to have more shoes drop in the banking sector.”

The European Central Bank is also expected to raise rates at its policy meeting on Thursday.

Also pressuring oil prices, government data showed US gasoline inventories unexpectedly rose by 1.7 million barrels last week. Analysts polled by Reuters had expected a 1.2-million-barrel drop.

“The most notable thing is that gasoline demand gave back all of the increases that we’d seen in previous weeks,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

US crude inventories fell by 1.3 million barrels in the week, compared with forecasts for a 1.1 million-barrel drop.

In China, data over the weekend showed April manufacturing activity fell unexpectedly in the world’s largest energy consumer and top buyer of crude oil.

Morgan Stanley lowered its forecast for Brent prices to USD 75 a barrel by year-end.

“Downside risk to Russia’s supply and upside risk to China’s demand have largely played out and prospects for 2H tightness have weakened,” the bank said in a note, referring to buoyant exports from Russia despite Western sanctions.

(Reporting by Stephanie Kelly; additional reporting by Noah Browning and Muyu Xu
Editing by Emelia Sithole-Matarise, Marguerita Choy, and David Gregorio)

 

This article originally appeared on reuters.com

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