Oil prices extend losses ahead of Fed meeting
Oil prices shed as much as $4 a barrel on Monday, extending last week's decline as diplomatic efforts to end the war in Ukraine were stepped up and markets braced for higher U.S. rates, News.Az reports citing Reuters.
Brent crude futures were last down by $3.05 or 2.7% at $109.62 a barrel at 0351 GMT on Monday.
U.S. West Texas Intermediate (WTI) crude futures eased $3.10 or 2.8% to $106.23 a barrel.
Russia and Ukraine gave their most upbeat assessments after weekend negotiations, suggesting there could be positive results within days.
"Oil prices might continue moderating this week as investors have been digesting the impact of sanctions on Russia, along with parties showing signs of negotiation towards ceasing fire," said Tina Teng, an analyst at CMC Markets.
"As markets had priced in for a much tighter supply from February to early March, the focus is shifting to the monetary policy in the upcoming FOMC meeting this week, which could strengthen the USD further, and pressuring on commodity prices," Teng added.
The U.S. Federal Open Market Committee meets on March 15-16 to decide whether or not to raise interest rates.
U.S. consumer prices had surged in February, leading to its largest annual increase in inflation in 40 years, and is set to accelerate even furthers.
The Federal Reserve is expected to start raising rates this week, which would put downward pressure on oil prices. Oil prices typically move inversely to the U.S. dollar, with a stronger greenback making commodities more expensive for foreign currency holders.
Brent has already lost 4.8% last week and U.S. WTI fell 5.7%, both posting their steepest weekly decline since November. That was after both contracts hit their highest levels since 2008 earlier in the week on supply concerns after the United States and European allies considered banning Russian oil imports.