With global central banks following the Federal Reserve in hiking interest rates to battle inflation, there are concerns about economic growth and demand for crude oil, even if supplies are very tight.

Market reaction

At $113.20 a barrel, West Texas Intermediate crude for July delivery was down by 2.11 cents or 1.8% on the NYMEX.

Brent oil BRN00, -1.00 percent, for August delivery. On ICE Futures Europe, the global benchmark BRNQ22 (-1.00 percent) slid $2.24 (1.9 percent) to $116.27 a barrel.

New York’s Nymex index shows that July gasoline RBN22 (-0.31%) lost 1.6% to $3.8316 a gallon and July heating oil HON22 (-1.96%) dropped 2.3%.

(NGN22, +4.69 percent) July natural gas NGN22, +4.69 percent surged 5.4 percent to a price of $7.811 per million British thermal units in July.

Market influences

On Thursday, the price of oil fell in tandem with the price of stocks and other risky assets.  On Thursday, the S&P 500 was expected to begin substantially lower, although other central banks were also raising interest rates.

Both the Swiss National Bank and the Bank of England raised interest rates by a quarter of a percentage point on Thursday.

‘Fed-driven demand destruction is on its way,'” noted Stephen Innes, managing partner at SPI Asset Management, in emailed remarks.

“Oil prices continue to struggle to breach into the higher ground as the Fed’s new inflation radar is pinging louder. Oil prices have risen in recent months, and this suggests that the Federal Reserve may be willing to hike rates indefinitely to combat persistent energy inflation, regardless of the impact on employment.

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