NEW YORK: Oil prices fell by more than $2 a barrel on Tuesday after comments from US Federal Reserve Chair Jerome Powell stoked rate hike fears, the dollar strengthened and top crude importer China issued weak data.
Brent crude futures shed $2.35, or 2.7%, to $83.83 a barrel by 1:05 p.m. EST (1805 GMT) US West Texas Intermediate crude dropped by $2.48 a barrel, or 3%, at $77.98.
Prices sank after Powell told Congress the Fed would likely need to increase rates more than expected in light of recent strong economic data.
“Those comments are ripping through the market, which has taken on a risk-off sentiment,” said John Kilduff, a partner at Again Capital LLC in NYC.
The remarks boostsed the US dollar, which rose more than 1% on the day at 105.41, weighing on dollar-denominated oil by making it more expensive for buyers paying with other currencies.
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