Oil rises as Fed expects aggressive rate hike

Oil rose in Asia on Wednesday amid concerns about an uncertain economic outlook ahead of the Fed’s interest rate decision. Brent rose 0.14% to $121.34, while WTI rose 0.15% to $119.11. On Tuesday, the American Petroleum Institute showed that U.S. crude inventories had increased by 0.736 million barrels in the week to June 10. Data on Friday showing very high inflation had raised market expectations for a 75 basis point hike. “An aggressively hawkish signal from the Fed could fuel fears of a global recession that would hit demand in the energy market,” DailyFX analyst Leona Liu told Reuters. “If the Fed says it will raise rates by 75 basis points today, oil prices could fall significantly against the dollar in the short term as a hawkish Fed could lead investors to turn to the safe-haven dollar, hurting risk-sensitive assets like oil.” New cases in Beijing and subsequent restrictions have added to concerns about Chinese oil demand. In its monthly report, OPEC+ stuck to its prediction that world oil demand will exceed pre-pandemic levels in 2022. Today, the US Energy Information Administration's crude oil inventory data will be shared.