NEW YORK: Oil futures eased about 1% on Thursday, as traders took profits after prices soared early to 10-month highs and some worried that high interest rates may weigh on western economies and oil demand.
On its second to last day as the front-month, Brent futures for November delivery fell 43 cents, or 0.5%, to $96.12 a barrel by 11:21 a.m. EDT (1521 GMT).
Brent futures for December, which will soon be the new front-month, were down 0.3% to $94.07 per barrel.
US West Texas Intermediate (WTI) crude fell 77 cents, or 0.8%, to $92.91 per barrel.
The Brent front-month rose early to its highest since November 2022 and WTI to its highest since August 2022 on scarce supply and inventory declines.
But with Brent near $100 a barrel, more traders are worried that high oil prices will encourage central bankers to persist with high interest rates to curb sticky inflation.
“Investors know that higher oil prices are going to hurt the economy ... not to mention the fear of rates staying higher for longer,” said Naeem Aslam of Zaye Capital Markets.
The US economy maintained a fairly strong 2.1% pace of growth in the second quarter and appears to have gathered momentum this quarter with a resilient labor market driving strong wage gains.
Growth estimates for the July-September quarter are currently as high as a 4.9% rate. But the fourth quarter could see a sharp slowdown if there is a US government shutdown due to infighting among Republicans in the House of Representatives.
US Federal Reserve (Fed) officials are focused on the super core price measure after hiking the benchmark overnight interest rate by 525 basis points since March 2022 to the 5.25%-5.50% range.
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