Oil prices edge higher, but expected U.S. interest rate hike looms

Shafaq News / Oil prices made gains on Wednesday, rebounding from losses earlier in the session amid concerns over fuel demand and the broader economy ahead of an expected big hike in interest rates by the U.S. Federal Reserve.

In volatile trading Brent crude futures for August were up 15 cents, or 0.1%, at $121.32 a barrel as of 0422 GMT after falling to as low as $120.65 earlier in the session on the back of a 0.9% decline on Tuesday.

U.S. West Texas Intermediate crude for July rose 15 cents, or 0.1%, to $119.08 a barrel, after hitting a low of $118.22 earlier in the day, having dropped 1.7% a day earlier.

Surging inflation has led investors and oil traders to brace for a big move by the Fed this week - a 75-basis-point increase, which would be the largest U.S. interest rate hike in 28 years.

On the demand side, China's latest COVID outbreak, traced to a 24-hour bar in Beijing, has raised fears of a new phase of lockdowns.

The country's economy, however, showed signs of recovery in May after slumping in the prior month as industrial production rose unexpectedly.

(Reuters)