The president of the Chicago Federal Reserve, Charles Evanssaid there was un strong consensus at the Fed to raise rates to around 4.5% by March and keep them there.
“There’s more pessimism on the part of people about what they’re going to do with the economy, because they’re not as convinced they’ve got inflation under control, and that’s the macro game that’s weighing on oil,” said John Kilduff, Partner at Again Capital LLC in New York.
Oil prices were also affected by the strengthening of the US dollar, that went up for the fourth session. A stronger dollar makes crude more expensive for non-US buyers.
The prospect of reduced OPEC+ oil supplies limited the price decline. But indications that the group’s de facto leader, Saudi Arabia, would continue to serve Asian clients at full capacity lowered expectations of the impact of the cuts.
Brent and WTI posted their biggest weekly percentage gains since March following the OPEC+ tapering announcement.
Concerns about still relatively robust demand have been heightened by the European Union’s backing late last week for a G7 plan to impose a price cap on Russian oil exports.
“A recessionary economic outlook will cause lower demand for oil,” Fitch Ratings said on Monday. “However, we expect price volatility to remain high in the short term, due to geopolitical factors, such as new sanctions leading to reduced Russian exports.”
Meanwhile, service sector activity in China during September contracted for the first time in four months as COVID-19 restrictions hit demand and business confidence, data showed on Saturday.
The slowdown in China The second largest consumer of oil in the world, behind the United States, adds to the growing concern about a possible global recession caused by the rise in interest rates by numerous central banks to combat high inflation.
Source: Ambito
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