After the Federal Reserve delivered the biggest rate hike in almost three decades, and a US government report showed signs of gasoline demand slowing, oil prices slipped.

Following the Fed’s 75 basis point hike, West Texas Intermediate fell below $116, the first time it broke that barrier in two weeks. Traders assume higher interest rates will slow the economy and reduce demand, causing the price to drop.

Prices had already dropped slightly on news that US Crude production hit 12 million barrels per day for the first time since the start of the pandemic, and gasoline demand dropped below seasonal norms. Gasoline demand this week was the lowest since 2013, not counting 2020 when pandemic lockdowns artificially suppressed demand.

Rebecca Babin, senior energy trader at CIBC Private Wealth Management said, “There is growing angst under the bull thesis and each data point is going to be heavily scrutinized for evidence of demand falling off. This leaves the market susceptible to both large moves higher and lower as investors are on a knife’s edge.”