[International Oil Prices] Brent crude retreats to the $105 range after U.S. rate hike

[Financial News]  

International oil prices fell sharply on September 16 local time.
The decline came after the Federal Reserve System (Fed) concluded its two-day Federal Open Market Committee (FOMC) meeting and raised its benchmark interest rate for the first time in three years.
Brent crude oil for November delivery, the benchmark for international oil prices, fell 2.7% from the previous session to settle at $105.83 per barrel.
West Texas Intermediate crude oil (WTI) for October delivery, the U.S. benchmark, plunged 3.2% to $102.43 per barrel.
Despite the declines, Brent crude oil and WTI have each surged more than 16% this month.
The price decline appears to have resulted from the FOMC meeting’s outcome, even as forecasts indicated that restoring Saudi Arabia’s East–West Crude Oil Pipeline (Petroline), which was shut down after an attack by the Houthi rebels in Yemen, could take several weeks.
The Fed raised interest rates by 0.25 percentage points and signaled that it could raise them once more this year.
This boosted the dollar, the currency in which international oil prices are denominated.
The dollar surged to a seven-month high after the rate hike. It strengthened across the board against major currencies, including the euro, Japanese yen, British pound, Australian dollar and Canadian dollar.
A stronger dollar raises the cost of crude oil for countries outside the United States, reducing global oil demand and putting downward pressure on prices.
Concerns that the U.S. rate hike could slow the economy also contributed to pressure on demand.

[email protected] Song Kyung-jae Reporter