Crude Prices Drop Further Before Expected Interest Rate Hikes

Oil prices fell 4% on Wednesday, extending steep losses from the previous session after the U.S. Federal Reserve raised interest rates and as investors fretted about the economy.

Brent futures dropped 3.8%, or $2.85, to $72.47 per barrel. The global benchmark reached a session low at $71.70 per barrel, the lowest since March 20.

U.S. West Texas Intermediate crude (WTI) dropped 4.1%, or $2.92, to $68.74 per barrel. WTI fell to a session low of $67.95 per barrel, the lowest since March 24.

During the previous session, both benchmarks declined 5%, when they recorded their biggest daily percentage drops since early Jan.

It is expected the Fed will hike interest rates by 0.25%, while the European Central Bank is also likely to hike rates at Thursdays policy meeting. Rate hikes may hit energy demand and slow economic growth.

Oil prices extended their losses after data from the government showed U.S. gasoline inventories gained by 1.7 million barrels unexpectedly last week. Analysts had anticipated a drop of 1.2 million barrels.

During the week, U.S. crude inventories dropped by 1.3 million barrels, compared with expectations for a drop of 1.1 million barrels.