Fed hike dips oil price

Crude futures added sharp losses to those from previous sessions after US Federal Reserve announced a rate hike and Energy Information Administration released official figures on Wednesday showing a surprise build in US inventories.

West Texas Intermediate futures for January delivery dropped $0.12 to $35.40 per barrel early on Thursday. Brent crude futures for February delivery fell $0.21 to $37.18. The price per barrel for West Texas Intermediate was down 5% on Wednesday.

US crude stocks also increased last week as imports from the US Gulf Coast supplemented inventories, now 4.8 million barrels. Reuters had predicted a drop of 1.4 million barrels after polling analysts.

Ric Spooner, chief market analyst at CMC Markets in Australia, told Reuters that the Energy Information Agency inventory data was unsettling for the market.

However, Spooner added that the US dollar was getting stronger after an interest hike. A stronger dollar makes oil and other dollar-denominated commodities more expensive and undermines demand.