Oil heads for weekly loss on Fed rate hike worries, signs of ample supply

LONDON (Reuters) – Oil fell almost 3% on Friday and was on course for a weekly decline, pressured by concerns of more U.S. Federal Reserve interest rate hikes that could weigh on demand, and signs of ample supply.

Two Fed officials on Thursday warned additional hikes in borrowing costs are essential to lower inflation to desired levels. Heightened rate hike expectations boosted the U.S. dollar, making oil more expensive for holders of other currencies.

Brent crude futures were down $2.37, or 2.8%, to $82.77 a barrel by 1145 GMT, while West Texas Intermediate (WTI) U.S. crude fell $2.07, or 2.6%, to $76.42.

Both benchmarks were heading for a weekly decline of more than 4%.