Oil Drops by 3% on Renewed Fears of Weak US Demand

US crude prices fall 3.3% to $75.87 a barrel and are on course to finish with a weekly decline of nearly 5%. “Crude oil is lower on Fed comments that a half-percent rate hike in March may be needed — thus reawakening the prospects of lower demand,” says Peter Cardillo at Spartan Capital. Two Fed officials said yesterday that they favored larger rate hikes than the quarter-point increase announced at the Fed’s Feb. 1 meeting. The remarks come as January inflation came in hotter than expected, and as gasoline and diesel fuel prices at the pump both remain well above the five-year average.