Oil Prices Soar Amid Supply Fears, Rate Hikes Loom

Asian share markets declined on Monday as rising oil prices caused by supply concerns and anticipation of interest rate hikes in the US and Japan weighed on investor sentiment. Brent crude oil surged 3% to $107.84 a barrel, while US crude rose 2.8% to $102.85 a barrel.

Investors are bracing for possible rate hikes in both countries, with markets pricing in an 86% chance the Federal Reserve will lift rates by 25 basis points on Wednesday and another hike by December. Michael Feroli, chief US economist at JPMorgan, expects the Fed to hike twice this year, in September and December.

The Bank of Japan is also expected to raise its cash rate by a quarter point to 1.25% when it meets on Friday, with markets implying around a 76% chance of this happening.