Crude oil prices continue to decline after the Fed raises interest rates.

After the U.S. Federal Reserve raised interest rates and investors became concerned about a slowing global economy that could reduce energy demand, oil prices fell more than 1% on Thursday, compounding recent steep losses. Brent futures had decreased by 76 cents, or 1.1%, to $71.57 per barrel. On Wednesday, the global benchmark recorded its lowest settle since December 2021.

West Texas Intermediate (WTI) crude for the United States dropped $1 or 1.5% to $67.60 a barrel. WTI hit a session low of $63.64 per barrel in early trade on Thursday, the lowest price since December 2021. Since the beginning of this week, both Brent and WTI have decreased by more than 10%.

The Federal Reserve increased interest rates by a quarter of a percentage point on Wednesday afternoon. Higher rates could limit economic development and have an impact on energy use, which knocked on oil prices. However, the Fed also hinted that it might postpone further increases, giving officials more time to assess the effects of recent bank failures, watch for an end to the political impasse over raising the U.S. debt ceiling, and keep an eye on inflation.

The third large U.S. institution to fail in two months, First Republic, was seized by U.S. regulators on Monday. JPMorgan Chase & Co. agreed to accept $173 billion of the bank’s loans, $30 billion of its securities, and $92 billion of its deposits.

Investors kept a close eye on the European Central Bank, which is expected to hike interest rates for the seventh consecutive meeting on Thursday as part of its ongoing struggle with stubborn inflation. It’s yet unclear how big the shift will be.

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