Oil prices tumbled yesterday, weighing down energy shares in the wake of a report of rising crude stocks, while the US dollar strengthened ahead of an ex-pected Federal Reserve decision to raise interest rates.

Oil prices slid to three-month lows after Opec reported a rise in global crude stocks and a surprise jump in production from its biggest member, Saudi Arabia, despite output curbs by the group.

US crude prices fell 1.8 per cent to $47.53 a barrel, touching their lowest point since November 30.

Benchmark Brent crude fell 1.4 per cent to $50.63 a barrel.

The decline in oil prices “affects the energy stocks, which affects the overall US market,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“But it also calls into concern growth worldwide and that affects markets obviously, and I think you’re seeing a bit of that today.”

MSCI’s all-country world stock index fell 0.4 per cent.

On Wall Street, equity indexes opened lower, with the energy sector the worst performing group, falling 1.5 per cent.

The Dow Jones Industrial Average fell 61.83 points to 20,819.65, the S&P 500 lost 11.95 points, or 0.50 per cent, to 2,361.52 and the Nasdaq Composite dropped 34.86 points, or 0.59 per cent, to 5,840.93.

The US Federal Reserve said it would hold a policy meeting as planned today, even as a snowstorm hit Washington.

With the central bank widely expected to raise rates, the focus is on the pace of future hikes.

“The big question is ‘does the Fed become even more hawkish and point towards the possibility of more than three rate hikes’?” said Constantin Bolz, head of currency strategy at UBS Wealth Management in Zurich.

Investors also are assessing the potential outcome and impact of a gathering of G20 finance chiefs, US President Donald Trump’s first budget and a tense election in the Netherlands.

The pan-European STOXX 600 share index shed 0.4 per cent, as banking and energy shares fell.

The dollar rose 0.2 per cent against a basket of key currencies, bolstered by the Fed’s expected interest rate increase and by political risks in Europe amid Dutch and French elections that have pressured European currencies.

The euro fell 0.2 per cent on caution ahead of the Dutch vote.

United States Treasury yields edged lower yesterday, with long-dated and benchmark yields retreating from three-month highs touched overnight as traders neutralised bets ahead of the Fed’s decision.

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