Prices of crude oil decline due to concerns that future rate increases will reduce demand for gasoline.

As investors took profits on worries that future interest rate increases by central banks might stifle economic growth and global fuel demand, oil prices declined on Thursday, erasing some of the gains made the day before. The price of Brent crude futures had decreased by 27 cents, or 0.4%, to $73.76 per barrel. American West Texas Intermediate (WTI) oil futures fell 21 cents, or 0.3%, to $69.35 per barrel.

After the U.S. Energy Information Administration (EIA) reported that crude stockpiles fell by 9.6 million barrels in the week ending June 23, considerably exceeding the 1.8-million barrel reduction analysts had predicted in a Reuters poll, both benchmarks increased by about 3% on Wednesday.

Hiroyuki Kikukawa, president of NS Trading, a division of Nissan Securities, stated that the market changed direction due to fresh concerns about more interest rate increases in the U.S. and Europe, which will lower global oil consumption. On Wednesday, the heads of the top central banks in the world reiterated their belief that additional policy tightening will be necessary to contain persistently rising inflation, but they also maintained their confidence that they can do so without causing full-fledged recessions.

While European Central Bank President Christine Lagarde confirmed expectations for a ninth straight increase in eurozone interest rates in July, U.S. Federal Reserve Chair Jerome Powell did not rule out additional raises at the central bank’s upcoming meeting.

The second-largest user of oil in the world, China, saw annual profits at industrial enterprises extend a double-digit slide in the first five months as softening demand squeezed margins. Brent’s six-month backwardation, which measures how much more expensive sooner-loading contracts are relative to later-loading ones, hit its lowest level since December, signaling increased demand for immediate delivery.

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