Oil prices fell on Monday as concerns about rising interest rates, the global economy and the outlook for fuel demand outweighed support from the prospect of tighter supplies on OPEC+ supply cuts.
Brent crude slipped 75 cents, or 0.92 percent, to $80.91 a barrel while US West Texas Intermediate crude CLc1 was at $77.13 a barrel, down 74 cents, 0.95 percent lower.
Both contracts fell more than 5 percent last week, their first weekly drop in five, as US implied gasoline demand fell from a year ago, fuelling worries of a recession at the world’s top oil consumer.
Weak US economic data and disappointing corporate earnings from the tech sector sparked growth concerns and risk aversion among investors, CMC Markets analyst Tina Teng said.
The stabilising US dollar and climbing bond yields are also pressurizing commodity markets, she added.
Central banks from the United States to Britain and Europe are all expected to raise interest rates when they meet in the first week of May, seeking to tackle stubbornly high inflation.
China’s bumpy economic recovery post COVID-19 also clouded its oil demand outlook, although Chinese customs data showed on Friday that the world’s top crude importer brought in record volumes in March. China’s imports from top suppliers Russia and Saudi Arabia topped 2 million barrels per day (bpd) each.
“I would cite recent mixed economic data and continued central bank intervention as the primary drivers behind the recent price correction,” said John Driscoll, director of JTD Energy Services. However, many may view this as a dip-buying opportunity, he said. – Reuters
