(Bloomberg) — Oil retreated for the first time in four days on the prospect of tightening U.S. monetary policy, and on signs Chinese demand will weaken due to the worst Covid-19 outbreak since the initial flareup in Wuhan.
Futures in New York fell toward $77 a barrel after rising 3.5% over the past three sessions. Federal Reserve officials said a strengthening economy and higher inflation could lead to earlier and faster interest-rate increases than previously expected, according to minutes published Wednesday. China has locked down some cities to try and stem the spread of the virus.
Russia and its allies, meanwhile, will send “peacekeeping forces” to OPEC+ producer Kazakhstan, where anti-government protests have swept the country in recent days, the Kremlin said in a statement early Thursday.
Oil ended 2021 on a strong footing as the rollout of vaccines helped economies to reopen, boosting energy demand and allowing OPEC+ to maintain its gradual monthly output increases. Some members of the group have struggled to meet their targets, however, curbing the overall expected return of supply.
At the conclusion of the December meeting, the FOMC announced it would wind down the Fed’s bond-buying program at a faster pace than first outlined at the previous meeting in early November, citing rising risks from inflation. The new schedule puts the central bank on track to conclude purchases in March.
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