WASHINGTON (dpa-AFX) - Oil prices fell sharply on Thursday as the dollar rallied on hawkish Fed comments and China affirmed that a zero-tolerance approach continues to be the overall strategy in tackling COVID-19.
Brent crude futures fell 1.3 percent to $94.89 a barrel, while WTI crude futures were down 1.6 percent at $88.53.
The U.S. dollar strengthened on higher bond yields after the Federal Reserve raised rates by 75 basis points, as widely expected, and signaled more increases ahead saying the Committee will consider the cumulative tightening of monetary policy while determining the pace of future increases.
Observers characterized Fed chair Jerome Powell's comments at the press conference as more hawkish than expected.
Powell warned that thoughts about a potential pause would be 'very premature', and that the Fed hasn't 'overtightened' yet as the battle against inflation would require borrowing costs to rise further.
Elsewhere, China once again imposed lockdown in several cities across the country and also ramped up COVID restrictions to fight a surge in fresh cases.
Health authorities reiterated adherence to the zero-COVID policy, dashing hopes around the reopening.
Also, a private survey showed earlier today that China's service sector registered a sustained slowdown in activity as efforts to curb the spread of Covid-19 continued to disrupt business operations in October.
The Caixin services Purchasing Managers' Index fell to 48.4 in October from 49.3 in the previous month.
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