Oil prices fell below $85 a barrel on Tuesday as investors remained wary of aggressive interest rate hikes in the US amid signs of high inflation. The announcement of oil sales from strategic reserves dampened sentiment.
On the London market, the barrel price in the afternoon was even $2.01 lower than at the close of trading on Monday, and amounted to $84.6 per barrel. On the American market, a barrel was traded at a lower price of $2.21 from $77.93, the Mina agency reports.
Traders focused on the US Department of Energy’s announcement that it would sell 26 million barrels of oil from its strategic reserves, which are currently at their lowest level since 1983.
The department was considering giving up sales this year after President Joe Biden’s administration sold a record 180 million barrels last year, but such a move would require congressional approval.
At the same time, Washington eased supply concerns by estimating record oil production in the seven largest shale basins.
Traders also carefully analyzed data on inflation in the US in January. Prices rose again compared to December, when they stagnated, fueling fears that the US central bank, the Federal Reserve, could aggressively raise interest rates, curbing the economy and demand for oil.
Rising interest rates
Most economists in a Reuters poll predicted that the Fed would raise interest rates at least two more times in the coming months. The pressure on prices was also the restoration of exports through the key Turkish export port of Ceyhan after the devastating earthquake that claimed tens of thousands of human lives and damaged the infrastructure.
At the same time, OPEC raised its estimate of oil demand this year only slightly, by only 100,000 barrels per day, pointing to the opening of the Chinese economy after the lifting of strict measures to suppress the COVID-19 virus.
In a separate report, OPEC announced that the price of a barrel of its members’ oil basket rose 59 cents to $84.23 a barrel on Monday.
