Oil prices are up again and in a rare reversal, the price of a barrel of crude has fallen to a new low.
US crude oil futures for December delivery traded up 1.8 per cent to $48.83 per barrel, after the US central bank said on Wednesday it would begin to raise interest rates to ease a global financial crisis and to reduce reliance on energy imports.
The move comes as the US and China are both pushing ahead with plans to cut carbon emissions to limit global warming and reduce the country’s dependence on oil.
In the past few months, US oil prices have dropped by almost 10 per cent from the peak of $108 a barrel in December 2015.
Brent crude, the benchmark international price, is up 3.5 per cent at $51.87 a barrel, while the benchmark U.S. West Texas Intermediate (WTI) is up 5.4 per cent.
Brent is currently trading at $50.88 a barrel.
US oil companies have said they would need to raise prices further in order to make up for the decline in global demand, which has been fuelled by a slowdown in China.
US shale oil production, which is growing at a slower rate than previously expected, has helped to boost demand for crude.
The global price of crude fell in December, dropping to $54.96 a barrel after the central bank raised interest rates for the first time since March.
Brent and WTI futures also fell in the past week, after China announced a ban on coal imports in a bid to combat pollution.
China is also struggling to meet the demands of its population growth, and has already cut back on coal production.
The central bank’s decision to raise rates is expected to continue for at least a few months.
The U.K. also reported higher inflation, as inflation for February fell to 1.5 percent, from 1.7 percent in January.
US interest rates have been stuck at historic lows for a decade and are now set to rise for the third time in less than a year.
The Federal Reserve has already said it will increase its key rate by one-third in the next six months, and if there is another rise, it will be on the first day of March.
US economic growth has been stagnant since the 2008 financial crisis, with the economy contracting by a total of 2.7 per cent in 2015.
The economy was already shrinking when the central banks stimulus measures were announced.