Oil prices and stock indexes resumed their decline in anticipation of an increase in the Fed's discount rate

After a long period of growth, oil prices and stock indexes turned down on January 24 on expectations of an increase in the discount rate in the United States and a tightening of the Fed's financial policy in order to contain inflation. Analysts believe that at the Fed meeting, which will last until Wednesday, interest rates will be raised faster than previously expected.

March Brent crude futures fell 2% to 8 86.2/barrel yesterday (although they fell to.85/barrel during the session), and WTI crude on the New York NYMEX-2.3% to. 83.3/barrel, turning down for the first time after rapid growth since the beginning of the year by 12.8% and 14.8%, respectively.  

The reason for the decline in prices was the strengthening of the dollar against other currencies against the background of increased tension between Russia and Ukraine, as well as a decrease in forecasts for the development of the US economy, caused by not too optimistic data from annual reports of companies and a decrease in the value of stocks and stock indices.

At the same time, due to Russia's aggressive policy, the value of the country's securities is falling sharply, as is the ruble exchange rate against the dollar.

US stock indexes also fell significantly on Friday, and the S&P 500 and Nasdaq Composite showed the highest drop since March 2020. So, the Nasdaq fell by 10% over the week to 13,481 p, losing 15% from the November high. The S&P 500 index fell 5.7% over the week, while the Dow Jones fell 4.6%, the worst dynamics since October 2020.

On Monday, stock indexes continued to fall, but at the end of trading they recovered to the level of Friday.

Further heightened tensions around Ukraine will negatively affect oil prices, as Russia supplies significant amounts of oil to the world market, and any reduction in supplies will change the balance sheets that OPEC+countries have been discussing for so long.