Oil prices fell nearly a dollar a barrel on Monday amid the growing likelihood of more US interest rate hikes.but the Crude supply cuts from major exporters Saudi Arabia and Russia limited losses.
crude oil futures Brent fell 78 cents, or 0.99%, to $77.69 the barrel. The contract touched its highest level in more than two months earlier in the session. US WTI crude closed higher fell 84 cents, or 1.2%, to $72.99.
“Traders are very nervous about further interest rate hikes, which could ruin demand very quickly,” said Dennis Kissler, senior vice president of trading at BOK Financial, adding that some investors were also taking profits after last week’s price increases.
Both Benchmarks they rose more than 4.5% last week after Saudi Arabia and Russia announced further production cuts, bringing total cuts for the OPEC+ group to around 5 million barrels per day (bpd), or about 5% of global crude demand.
San Francisco Federal Reserve President Mary Daly reiterated Monday that she believes two more rate hikes will likely be needed this year to reduce inflation, it is still too high, while Cleveland Fed Chief Loretta Mester also suggested more rate hikes. Higher US interest rates could slow economic growth and reduce demand for oil.
The US Department of Labor reported the smallest monthly job gain in two and a half years on Friday, along with strong wage growth. The data bolstered the likelihood that the Fed will raise interest rates at its meeting this month.
Meanwhile, Chinese factory prices fell in June at their fastest pace in more than seven years, government data showed on Monday, amid a slowing recovery in the world’s second-largest economy.
Source: Ambito
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