SING`ORE, April 24 (Reuters) – Oil prices slid 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 due to OPEC+ supply cuts.
Brent crude was down 48 cents, or 0.6%, to $81.18 a barrel by 0045 GMT, while US West Texas Intermediate crude was at $77.39 a barrel, down 48 cents and also 0.6 % is equivalent to.
Both contracts fell more than 5% last week, their first weekly decline in five years, as US implied gasoline demand fell year-on-year, raising concerns of a recession in the world’s largest oil consumer.
Weak US economic data and disappointing corporate earnings from the technology sector sparked growth concerns and risk aversion among investors, said Tina Teng, an analyst at CMC Markets. The stabilizing US dollar and rising bond yields are also putting pressure on commodity markets, she added.
Central banks from the United States to Britain and Europe are expected to hike interest rates when they meet in the first week of May to combat stubbornly high inflation.
China’s bumpy economic recovery from COVID-19 also clouded the oil demand outlook, although Chinese tariff data on Friday showed the world’s biggest crude oil importer brought in record volumes in March. China’s imports from top suppliers Russia and Saudi Arabia each topped 2 million barrels per day (bpd).
Still, refining margins in Asia have softened on record production from top refiners China and India, dampening the region’s appetite for Middle Eastern supplies in June.
Still, analysts and traders remained optimistic about the rebound in China’s fuel demand in the second half of 2023 and as additional supply cuts planned by OPEC+ – the organization of petroleum exporting countries and allied producers including Russia – from May, are affecting the markets could tense.
“China’s recovery in oil demand is expected to more than offset slowing OECD demand in the near term, while sanctions and supply restrictions increase upside risk to prices,” analysts at the National Australia Bank said, adding that Brent is trading at 92 Dollar per barrel could rise by the end of the second quarter.
In the United States, energy companies last week added oil and natural gas rigs for the first time in four weeks, energy services company Baker Hughes Co (BKR.O) said.
Reporting by Florence Tan; Editing by Kenneth Maxwell
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