Oil futures traded lower Monday, after a third straight losing week, as investors await a Federal Reserve decision that’s expected to deliver another jumbo rate hike.

Price action
  • West Texas Intermediate crude for October delivery CL.1, -0.60% CL00, -0.60% CLV22, -0.60% fell $1.13, or 1.3%, to $83.98 a barrel on the New York Mercantile Exchange.
  • November Brent crude BRN00, -0.55% BRNX22, -0.55%, the global benchmark, was down 91 cents, or 1%, at $90.44 a barrel on ICE Futures Europe after trading as low as $88.50.
  • Back on Nymex, October gasoline RBV22, +0.06% fell 0.3% to $2.4095 a gallon, while October heating oil HOV22, +2.74% edged up by 1.4% to $3.2171 a gallon.
  • October natural gas NGV22, -0.05% declined 0.6% to $7.726 per million British thermal units.
Market drivers

WTI fell 1.9% last week, while Brent dropped 1.6%, with analysts tying weakness to fears of a sharp global economic slowdown or recession as major central banks, particularly the Federal Reserve, aggressively raise interest rates in a bid to bring down stubbornly high inflation.

The Fed is expected Wednesday to deliver another supersize 75 basis point, or 0.75 percentage point, rise to the fed-funds rate when it concludes a two-day policy meeting. Some investors and analysts say there’s the outside possibility of a 100-basis-point move.

Meanwhile, the Fed’s hawkish tone is driving the dollar higher. The ICE U.S. Dollar Index DXY, -0.01%, a measure of the currency against a basket of six major rivals, was up 0.2% on Monday at 109.996, trading near a 20-year high set last week.

“The oil market is in a rut as the recession fears seemed to overshadow what normally would be very bullish fundamentals,” said Phil Flynn, senior market analyst at The Price Futures Group, in a daily report. “This slew of central bank decisions around the globe, and by the Federal Reserve, and holiday trading in Japan in Asia, is allowing the market to ignore the potential for energy shortages this winter.”

“Short-term demand concerns are going to face the reality that inventories are still too tight going into winter,” and that the situation between Russia and Ukraine is still putting supplies of energy to Europe at risk, said Flynn.

Also, news reports said China has lifted its lockdown of Chengdu, following two weeks of heavy restrictions, should have provided a bounce for oil prices, he said. That eased some worries about a slowdown in energy demand.

Still, “with a lighter volume than normal, it appears that the market’s path of least resistance at this point is lower,” said Flynn.

Hear from top Wall Street energy analysts at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. RBC’s Helima Croft will be there.