Crude oil futures sold off on Tuesday after the Chinese central bank said that it would raise its lending and deposit rates and attempt to cut back on inflation in the world's second-largest economy.
The news from China is pushing back against bullish pressure from France, where continued strikes are threatening to paralyze the country by cutting off supplies of fuel and shutting down refineries. However, the effect of the French strikes is ambiguous – in the end, it might end up reducing demand for crude oil, since the refineries won't need any fresh supplies if they're shut down.
In the meantime, the country's ports remain shut.
On the IntercontinentalExchange, benchmark West Texas Intermediate light, sweet crude oil futures for December delivery slid nearly 4.75 percent to $80.01 per barrel. Brent crude oil futures dropped 4.37 percent to $80.83 per barrel.
"The surprise Chinese rate hike has sent the dollar higher and that’s pushing oil lower," Carl Larry, president of Oil Outlooks & Opinions in Houston, told Bloomberg News ."It's a double whammy, this could cause weaker demand along with strengthening the dollar."
A general flight to safety is occurring across a broad swathe of important markets, and that's driving the dollar higher and putting pressure on equities and commodities alike.
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