Oil prices drop as investors brace for interest rate hikes
Oil prices fell around three per cent on Monday, with both major benchmarks hit by the possibility of quicker than expected interest-rate hikes from the Federal Reserve.
Analysts widely anticipate a bump in interest rates from the current level of 0-0.25 per cent over the coming weeks, which has proven a major headwind to sustained market rallies in recent weeks.
Brent Crude has dropped to $85.46 per barrel, with prices plummeting 2.76 per cent while WTI has fallen by over three per cent to $82.43.
Prices initially rallied this morning amid heightened political tensions between Russia-Ukraine, but faded as grim news arrived of a looming spike in interest rates.
Nevertheless, the two benchmarks are up 10 per cent this year, but hopes of prices reaching $100 have dampened as the US has rebuilt its oil inventories, offsetting shortfalls from OPEC and its allies in recent months.