Brent crude fell below $75 for the first time since March, continuing its decline of more than 5 percent on Tuesday as the prospect of a recession in the US put pressure on the demand outlook and investors shun more risky assets.
Brent oil slid as much as 1.3 percent and closed at the lowest level in more than five weeks.
Crude oil slid along with other commodities as data showed the US labor market cooled ahead of the Fed’s decision, which is expected to be the final rate hike in the current tightening cycle.
However, recurring concerns about the US banking sector also added to the selling pressure.
Crude oil had been tough in 2023, despite China’s exit from the restrictive zero-Kovid policy and significant supply cuts by OPEC+.
The commodity’s decline was fueled by concerns that the US might be headed for recession and by Russia’s ability to sustain crude exports during the war in Ukraine.
Ole Sloth Hansen, Head of Commodities Strategy at Saxo Bank, said: “Despite current demand and growth concerns, the Fed is expected to raise again today, which continues to weigh on the demand outlook. Prices may once again move drastically down, as short sellers regain control.