Crude oil price outlook: The rate hike heard around the world! PBOC hikes interest rates by 25 basis points

The Chinese central bank (PBOC) raised interest rates for the first time in three years in a surprise moved that rocked commodity and currency markets. The US dollar retained its status as a safe haven currency as traders unwound trades and headed for cash and treasury securities. Commodity prices fell across the board with Crude Oil and Gold registering 4% and 2.7% single day session declines. Silver, Corn, Cotton, Platinum and Palladium followed south in a similar trend. The dollar picked up gains against Euro, Yen and the Australian dollar.

The rate hike by the Chinese central bank is the second strong signal in the past few months that indicates Chinese intentions to slow down the Chinese economy and has commodity and currency markets roiled. Combined with the US crude oil inventory and distillates release data that is scheduled for today and tomorrow, oil may take a more severe beating if there is any additional negative news today or tomorrow.