Oil Sinks More Than 5% as Powell Signals Faster End to Tapering By Bloomberg – Investing.com

Oil Sinks More Than 5% as Powell Signals Faster End to Tapering By Bloomberg – Investing.com

(Bloomberg) -- Oil in New York slid more than 5% after Federal Reserve Chair Jerome Powell said the strong U.S. economy may warrant ending the central bank’s asset purchases sooner than planned next year. 

Powell’s comments during a Senate Banking Committee hearing in Washington moved financial markets Tuesday as investors bet that a looming end to the taper could lead to an increase in interest rates. While tighter monetary policy can be a sign of economic strength, it’s typically bearish for commodities. West Texas Intermediate crude futures briefly dropped below $65 a barrel for the first time since August during the session, while the global benchmark also tumbled. 

“That ties back to crude oil because if you start to pump the brakes on economic growth, you start to see impact on demand,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management.