Oil widens losses on fears Fed hike will curb fuel demand
Oil prices are under pressure due to growing concerns that the US Federal Reserve's aggressive rate hikes will slow the global economy and reduce fuel demand, and the sluggish recovery in the Chinese economy. Oil prices fell on Monday, extending the recent streak of losses on concerns that an expected rise in US interest rates will weaken fuel demand.
Brent crude futures for the September settlement fell 67 cents, or 0.7%, to $102.53 a barrel as of 0421 GMT and fell for the fourth day.
West Texas Intermediate (WTI) crude futures for September delivery fell 77 cents, or 0.8%, to $93.93 a barrel and fell for the fourth day.
Both oil benchmarks gave up early gains.
Oil futures have been volatile in recent weeks amid traders' efforts to reconcile the tight supply stemming from the potential for further rate hikes that could restrain economic activity and thus dampen fuel demand growth, and cuts to trade for Russian products due to Western sanctions.
The US Federal Reserve will hold a policy meeting on July 26-27. Fed officials said the central bank would likely raise interest rates by 75 basis points.
China, the world's second-largest economy, narrowly missed the second quarter contraction, growing just 0.4% year-on-year in the second quarter, amid pressure from COVID-19 lockdowns, a weak real estate sector, and cautious consumer sentiment.
On the supply side, Libya will increase oil production to 1.2 million barrels in 2 weeks. The NOC said it aims to bring production back to 1.2 million barrels per day (bpd) within two weeks.
Market tone will continue its downward trend, as Libyan crude oil production resumption will ease the global supply tightness.
The European Union said last week that it would allow Russian state companies to ship oil to third countries as part of the adjustment of sanctions agreed by member states last week, aimed at limiting risks to global energy security.
But Russia's Central Bank Governor Elvira Nabiullina said on Friday that Russia will not supply oil to countries that have decided to set a price cap on Russia's oil.
Related Articles
Oil prices are rising as supply concerns increase amid expectations of a prolonged conflict in the Middle East
Oil prices continued to rise following US and Iranian attacks on ships serving their respective purposes
Oil prices closed higher this week following renewed US-Iran hostilities
