Oil sinks more than 5% and touches lows in six weeks

Oil sinks more than 5% and touches lows in six weeks

The oil prices fall this Tuesday May 2 for the weak economic data from China and the expectations of interest rate hikes by the Federal Reserve American and the European Central Bank (ECB) this week.

The crude Brent plunges 5% to $75.39 a barrel, while US crude West Texas Intermediate (WTI) down 5.3%, to $71.69. In this way, both referentials touch minimums in six weeks.

The price pressure was due to official data published on Sunday, according to which Manufacturing activity in China, the world’s leading importer of crude oil, fell unexpectedly in April. This is the first contraction in the manufacturing purchasing managers’ index since December.

Investors await the foreseeable rises in interest rates by central banksin the middle of his fight against inflationwhich could slow down economic growth and reduce energy demand.

The market estimates that the United States Federal Reserve raise interest rates another 25 basis points on Wednesday. He also hopes that the ECB raise rates at its regular meeting on Thursday.

The euro zone inflation slowed sharply from double-digit figures late last year, but remains high, making need a new rate hike and it only leaves the debate on its amount up in the air, since those responsible for the ECB’s monetary policy are divided between a rise of 25 or 50 basis points.

On the other hand, a survey carried out on Monday showed that crude oil reserves in the United States would have fallen for the third consecutive week, which would provide some support to the price of oil. The survey was conducted before American Petroleum Institute reportwhich will be published this Tuesday.

Source: Ambito

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