Oil prices drop further on fears that higher interest rates could curb demand

The price of a barrel of oil fell today in New York, for the second consecutive day, after new comments by the president of the Federal Reserve (FED), Jerome Powell, fueled the fire for another strong increase in the interest rate and the consequent possibility that this could produce a brake on economic growth. The barrel of the WTI variety fell 2% and traded at 104 dollars; while Brent crude oil fell 1.8% and settled at 109.80 dollars, according to figures provided by the New York Mercantile Exchange (NYMEX). Powell said that his commitment to fight inflation is “unconditional” and warnings about a possible recession and economic slowdown have overshadowed oil market fundamentals that indicate a growing supply crisis. Analysts believe that the prospects of a recessionary cycle counteract not only the recovery in demand, but also neutralize the tight supply of crude oil that is manifesting itself these months, due to supply problems. At the same time, fuel prices in the United States have begun to fall as a result of lower demand from transportation and private motorists. Now, the price per gallon is trading at an average of around 4.90 dollars, after exceeding 5 dollars the previous week, according to Bloomberg. Energy Secretary Jennifer Granholm met today with representatives of the main oil refining companies to try to increase the supply of fuels, but they have not reached an agreement. Traders did not have data on crude inventories, production, refining and exports, due to problems in the Energy Information Agency’s (EIA) systems, and had to resort to estimates from the American Petroleum Institute, which showed an increase of 5.6 million barrels of crude oil during last week, which also weighed on prices. Natural gas futures contracts traded down 9.2% and closed at 6.23 dollars per million BTU. Finally, gold prices fell 0.7% to close at 1,826 dollars per ounce (Télam).