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Oil prices fall as investors weigh Fed chair comments, rate hike

Thursday,   23-Mar-2023   08:07 AM (IST)

Oil prices fell on Thursday following three sessions of gains, after U.S. Federal Reserve Chair Jerome Powell re-stated his commitment to curbing inflation, including the possibility of more interest rate rises. Brent crude futures fell 80 cents, or 1%, to $75.89 a barrel by 00:09 GMT, while U.S. West Texas Intermediate crude (WTI) dropped 84 cents, or 1.2%, to $70.06. Both crude benchmarks had settled on Wednesday at their highest close since March 14. Powell also said on Wednesday that banking industry stress could trigger a credit crunch with "significant" implications for an economy that U.S. central bank officials projected would slow even more this year than previously thought. Meanwhile, U.S. Treasury Secretary Janet Yellen told lawmakers on Wednesday that she has not considered or discussed "blanket insurance" to U.S. banking deposits without approval by Congress as a way to stem turmoil caused by two major bank failures this month. The bank crises have caused volatile trade in riskier assets like oil over the last week as investors awaited the Fed's decision on rate hikes on Wednesday. The central bank's policy-setting committee raised interest rates by another quarter of a percentage point in a unanimous decision, lifting its benchmark interest rate to the 4.75% to 5.00% range. But in doing so it recast its outlook from a hawkish preoccupation with inflation to a more cautious stance to account for the fact that changes in bank behavior might have the equivalent impact of the Fed's own rate hikes.