Oil prices slip after U.S. interest rate hike on fears for demand

Oil prices edged lower in early Asian trade on Thursday after the U.S. Federal Reserve raised interest rates significantly to curb inflation, with fears for the global economy casting a shadow over future fuel demand.

Brent crude futures fell 16 cents, or 0.2 percent, to $89.67 per barrel by 0013 GMT, while U.S. West Texas Intermediate (WTI) crude dropped 15 cents to $82.79 per barrel.

The Fed raised its target interest rate on Wednesday by 75 basis points for the third time, to a 3-3.25 percent range, and signaled more large increases to come. Risk assets like stocks fell on the news, along with oil, while the dollar climbed to a 20-year high against a basket of other currencies, making crude more expensive for buyers not using the greenback.

Meanwhile U.S. gasoline demand over the past four weeks fell to 8.5 million barrels per day (bpd), its lowest since February, the U.S. Energy Information Administration said on Wednesday.

Elsewhere, Germany nationalized gas importer Uniper on Wednesday and Britain said it would halve energy bills for businesses in response to a deepening supply crisis that has exposed Europe’s reliance on Russian fuel.