Oil prices slipped on Monday as investors focused on short-term demand concerns ahead of U.S. inflation data. Brent futures for April delivery fell 30 cents to $86.09 a barrel, a 0.4% loss. U.S. crude fell 28 cents, or 0.4%, to $79.44 per barrel. “Oil prices have slipped back at the start of the week amid concerns of slowing global growth and in jittery trade ahead of tomorrow’s U.S. inflation report,” said Fiona Cincotta, Market Analyst at City Index. “Global economic growth is also dragging on risk sentiment.” The U.S. Federal Reserve has been raising interest rates to rein in inflation, leading to concerns the move would slow economic activity and demand for oil.
“It is difficult to overstate the importance of this single data point, as traders and the Fed look for confirmation of the gradual downward trend of the past few months,” said Matthew Ryan, head of market strategy at financial services firm Ebury. Additionally, supply concerns were relieved somewhat as a cargo of Azeri crude set sail from Turkey’s Ceyhan port on Monday, the first since a devastating earthquake in the region on Feb. 6. Ceyhan is the storage and loading point for pipelines that carry oil from Azerbaijan and Iraq.
Oil prices had risen on Friday to its highest in two weeks after Russia, the world’s third-largest oil producer, said it would cut crude production in March by 500,000 barrels per day (bpd), or about 5% of output, in retaliation against Western curbs imposed on its exports in response to the Ukraine conflict. Both the Brent and WTI contracts rose more than 8% last week, buoyed by optimism over demand recovery in China after COVID curbs were scrapped in December. Reuters
