WASHINGTON (dpa-AFX) - Crude oil prices retreated on Thursday after surging up earlier in the day, as the dollar climbed higher after the Fed signaled that it would start raising interest rates in March.
The dollar index jumped to 97.29, the highest level since November 22, 2021, reacting to the central bank's indication that the first rate hike since 2018 will happen 'soon.'
The central bank also said asset purchases will likely hald in March and process of balance sheet reduction will commence after it begins raising rates.
West Texas Intermediate Crude oil futures for March ended lower by $0.74 or about 0.9% at $86.61 a barrel.
Brent crude futures, which surged to a seven-year high above $90 a barrel, were down $0.76 or 0.85% at $87.98 a barrel a little while ago.
Natural gas prices soared, lifting the contracts for Natural gas for February delivery by $1.99 or almost 47% to $6.265 per million Btus, the largest one-day increase in percentage terms.
Rising tensions over Ukraine outweighed recent data from Energy Information Administration that showed a larger than expected increase in U.S. crude inventories last week.
Tensions in Ukraine contributed to concerns that energy supplies to Europe could be disrupted. However, concerns are focused on gas supplies rather than crude.
Data released by U.S. Energy Information Administration (EIA) showed crude inventories increased by 2.4 million barrels last week, as against forecasts for a 728,000-barrel decline.
Gasoline stockpiles rose by 1.3 million barrels in the week ended January 21 - smaller than the expected rise of about 2.5 million barrels.
The distillates inventories were down 2.8 million last week, more than twice the expected decline.
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