2023.01.3108:45:00UTC+00Oil Extends Losses On Rate Hike Worries

Oil extended losses on Tuesday, after having hit near 3-week lows on Monday amid worries about fuel demand and a decision by the Russian government banning domestic oil exporters and custom bodies from adhering to Western price caps.

Benchmark Brent crude futures fell 1.1 percent to $83.58 a barrel, while WTI crude futures were down 1.2 percent at $76.94.

The prospect of further interest rate hikes gripped financial markets as a two-day policy meeting of the Federal Reserve gets underway later today.

The U.S. Federal Reserve is due to announce its policy decision on Wednesday, with economists expecting a 25 basis-point lift amid signs of cooling inflation.

The accompanying statement and comments from Fed Chief Jerome Powell will be pored over for clarity on future rate hikes.

Investors are also pricing in a 50-bps rate hike from the Bank of England and European Central Bank this week.

Meanwhile, the Organization of Petroleum Exporting Countries and its allies (OPEC+) are due to hold a virtual meeting on February 1 and it is likely that the group will maintain production at current levels.