With President Trump in China talking about getting Beijing’s help in ending the war in Iran and fears of possible U.S. interest rate hikes, investors backed off on Wednesday sending crude oil futures down 1% to 2%.
Reuters reported Boston Federal Reserve President Susan Collins said on Wednesday the U.S. central bank may need to raise interest rates if inflation pressures do not abate, a sign that the war has begun to weigh on the U.S. economy. Higher oil prices have pushed up fuel costs and economists expect to see effects in the months ahead.
Higher interest rates increase borrowing costs for businesses and consumers, which could slow economic growth and reduce oil demand.
As a result, Brent crude futures closed down $2.14 or 2% to $105.63 a barrel.
West Texas Intermediate fell as well, but not as much. It settled down $1.16 or 1.14% and closed at $101.02 per barrel on the New York Mercantile Exchange.
Natural gas prices did just the opposite and finished the day with a slight gain. Prices settled at $2.857 MMBtu after a gain of $0.014 or 0.49%.
All but a few Oklahoma energy stocks finished Wednesday in negative territory. The largest drop, about 5%, was experienced by LSB Industries Inc.
But on the plus side of trading, Mammoth Energy Services rose nearly 11%. It was one of only 5 companies to record gains.