MOSCOW, 19 Sep — PRIME. World oil prices on Monday afternoon went down within 2%, the expensive dollar continues to hold back quotes, while markets are evaluating the prospects around demand amid expectations of the US Federal Reserve System (FRS) decision on the rate, according to trading data.
Dollar strengthens ahead of hawkish Fed decisions
As of 13.41 Moscow time, the price of November futures for Brent crude fell by 1.69%, to $89.81 per barrel, November futures for WTI — by 1.96%, to $83.1. In the morning, oil rose in price by an average of 0.5%.
The dollar index (the exchange rate against a basket of currencies of six countries – US trading partners) grew by 0.29%, to 110.08 points. The appreciation of the dollar holds back demand for commodities, including oil, which in this case become less available when buying in another currency.
Markets continue to expect the next meeting of the Fed, following which, on Wednesday, the regulator will announce its decision on the key rate. Experts predict the fifth rate increase in a row. Investors fear that the continued policy of raising rates around the world could lead to a recession, which is negative for demand prospects.
Recession fears are also reflected in stock market trading. Thus, Asian indices closed down by an average of 1%, European stock exchanges and futures for US indices are falling.
“Aggressive rate hikes will eventually contain growth. The main drivers at the moment are risk aversion and a strong dollar,” UBS Group AG commodities analyst Giovanni Staunovo told Bloomberg.
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