Oil falls as US rate hike expectations offset tight supply outlook
By Trixie Yap
(Reuters) -Oil prices fell in early Asian trade on Thursday, after posting the largest fall in a month in the previous session, as U.S. interest rate hike expectations offset the impact of drawdowns in U.S. crude stockpiles.
Brent futures for November delivery were down 71 cents, or 0.76%, to $92.82 a barrel by 0608 GMT. U.S. West Texas Intermediate crude (WTI) fell 70 cents, or 0.78%, to $88.96, the lowest since Sept. 14.
«The Fed kept rates unchanged at yesterday's FOMC meeting, as widely expected. However, it was still seen as a hawkish pause, which put some pressure on risk assets» such as oil, said ING analysts in a client note.
The U.S. Federal Reserve maintained interest rates after its Federal Open Market Committee (FOMC) meeting, but stiffened its hawkish stance with a rate increase projected by year-end which could dampen economic growth and overall fuel demand.
Fed policymakers still see the bank's benchmark overnight rate range peaking this year at 5.50% to 5.75%, a quarter of a percentage point above the current range.
The hawkish stance also led to the U.S. dollar surging to its highest since early March, placing downside pressure on oil prices. A stronger dollar typically makes commodities such as oil more expensive for buyers using other currencies.
Energy markets reacted little to data from the U.S. Energy Information Administration (EIA) on Wednesday showing crude inventories fell in line with expectations last week, with some analysts saying the decline was smaller than they expected.
«EIA data showed U.S. stockpiles fell 2.14 million barrels last week, well short of the 5.25 million barrel drop reported by the American Petroleum Institute. The disappointing inventory drawdown gave
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