Last night, the US Federal Reserve decided to raise discount rate by 25 basis points to 0.75% has had adverse impact on financial markets, particularly the equities and commodities.
The Fed’s decision helped US dollar to strengthen against basket of currencies and in the process pressure crude oil prices, gold and other industrial commodities which are traded in the currency.
US crude oil futures eased near $78 on Friday after the US Federal Reserve announced it was raising the interest rate it charges banks for emergency loans.
NYMEX crude for March delivery was down $1.01 cents at $78.05 a barrel after the Fed said it was raising the discount rate to 0.75% from 0.50%, citing improvement in financial market conditions.
On Thursday, oil prices rose $1.73 to $79.06, the highest settlement since January 14, after a government report showed a drop in US distillate supplies and on concerns OPEC-member may be working to develop a nuclear-armed missile.
US distillate inventories fell by 2.9 million barrelslast week, weekly data from the U.S. Energy Information Administration showed on Wednesday, nearly double the 1.5 million barrel draw forecast by analysts.
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