Oil prices fell for a third day in a row as concerns about an impending recession and the potential for a tenth US rate hike since the start of the pandemic weighed on the market. The price drop comes despite recent efforts by OPEC to boost output. The New York-traded West Texas Intermediate crude fell by 2.5% to $77.28 a barrel, while London-traded Brent crude, the global benchmark, fell by 2.4% to $81.11. The Federal Reserve's plan to raise interest rates by another quarter point when its policymakers meet in May added to the pressure. Additionally, a higher dollar and higher US bond yields limit the appeal of risk-heavy assets, affecting the demand for commodities priced in dollars.
Despite the positive US inventory data, which showed a fall in crude oil stockpiles, the market continued to decline. Technical reasons may also have contributed to the fall in WTI crude prices. The producer group OPEC+ had previously announced deeper production cuts to lift the market, but the collapse of lender Silicon Valley Bank in March led to fears of a US banking crisis and the market hit 15-month lows. Analysts are now monitoring whether the gap in prices will be filled, with the price needing to drop another 3% to take it back to the middle of the range oil was trading in for months prior to the SVB collapse.
