2023-07-03 00:48:00
Oil prices fell in early Asian trade on Monday as global macroeconomic headwinds and the possibility of another U.S. Federal Reserve interest rate hike offset supply cut forecasts under the OPEC+ cuts.
Brent oil futures fell 20 cents, or 0.3%, to $75.21 a barrel at 0044 GMT, following rising 0.8% on Friday. U.S. West Texas Intermediate crude was at $70.41 a barrel, down 23 cents, or 0.3%, following closing 1.1% higher in the previous session.
Brent fell for the fourth consecutive quarter at the end of June, while WTI recorded a second quarterly decline as the world’s two main economies, the United States and China, lost momentum during of the second trimester.
Fears of a further slowdown in fuel demand grew following Friday’s data showed US inflation still above the central bank’s 2% target and fueled expectations of a further rise interest rates.
“Upbeat rate comments continue to raise concerns regarding the demand outlook which are weighing on prices,” analysts at National Australia Bank said in a note.
Higher interest rates might strengthen the greenback, making commodities more expensive for holders of other currencies, and reduce demand for oil.
Later on Monday, Caixin will release its monthly China Private Sector Manufacturing PMI survey for June, which is expected to decline slightly from May.
Economists and analysts have lowered their forecasts for the price of Brent crude, which is expected to average $83.03 a barrel in 2023, according to the June Archyde.com Oil Poll.
However, some analysts expect tighter supplies and higher prices in the second half of the year following Saudi Arabia, the main exporter, pledged to cut production by 1 million barrels per day in July, as the United States gradually replenishes its strategic oil reserve.
“We continue to see price upside from current levels as the market is expected to turn deficit in the second half of 2023,” the NAB analysts said.
However, the latest Archyde.com survey showed OPEC oil output fell only slightly in June, as increases in Iraq and Nigeria limited the impact of cuts elsewhere.
Investors are eagerly awaiting the Organization of the Petroleum Exporting Countries (OPEC) conference later in the week for guidance on supply.
The number of U.S. oil rigs fell by one to 545 last week, its lowest level since April 2022, while the number of gas rigs fell by six to 124, its level the lowest since February 2022, according to data from Baker Hughes.
U.S. crude production fell in April to 12.615 million barrels per day (bpd), its lowest level since February, the U.S. Energy Information Administration said on Friday.
1688346542
#Oil #prices #fall #fears #slowing #global #economy
