OIL prices fell about 2 per cent on Monday, hit by investor concerns over the possibility of quicker than expected interest-rate hikes by the U.S. Federal Reserve that took down risk markets such as equities while the dollar rallied.
According to Reuters, Wall Street stocks slumped, after last week posting their worst week since 2020, pulling down other risk assets like crude.
“Everything is being taken out to the wood shed and the wood shed is a pretty crowded place,” said John Kilduff, a partner at Again Capital Management.
Brent crude fell $1.62, or 1.8 per cent, to $86.27 a barrel, while U.S. West Texas Intermediate (WTI) crude settled down $1.83, or 2.2 per cent, to $83.31.
Both benchmarks rose for a fifth week in a row last week, gaining about 2 per cent to reach their highest since October 2014.
Oil prices are up more than 10 per cent this year on the concerns over tightening supplies and OPEC+ now struggling to hit a targeted monthly output increase of 400,000 barrels per day.
The Relative Strength Index, a measure of short-term market sentiment, had until Monday been trading at levels considered indicative of a near-term correction in oil.
“Big picture, we believe oil is going higher over the long run, but short-term we’ve gotten overbought and juiced up on geopolitical risk,” said Flynn.
