The US Federal Reserve’s decision is expected to be followed by other central banks’ moves in Europe and Asia, which are also expected to increase borrowing costs.
Charu Chanana, a market analyst at Saxo Capital Markets Pte in Singapore, told Bloomberg: “If the Fed delivers a surprise rate hike today, it could mean a further drop in oil prices.”
“In the medium term, oil demand is still expected to remain strong as the harsh European winter could mean a further shift from gas to oil, while tensions between Russia and Ukraine are also escalating,” he added.
Giovanni Stonovo, commodities analyst at UBS, told Archyde.com that the oil market is currently stuck between downside fears and upside hopes, as concerns are driven by monetary tightening in the United States and Europe, which increases the possibility of a recession and this may affect the demand outlook for oil”.