Oil prices slip on global economic slowdown fears

economictimes.indiatimes.com:

Oil prices slipped in early Asian trade on Monday as global macroeconomic headwinds and possible further interest rate hikes from the U.S. Federal Reserves offset forecasts of tighter supplies amid OPEC+ cuts. Brent crude futures dropped 20 cents, or 0.3%, to $75.21 a barrel by 0044 GMT after settling up 0.8% on Friday.

U.S. West Texas Intermediate crude was at $70.41 a barrel, down 23 cents, or 0.3%, after closing 1.1% higher in the previous session. Brent fell for the fourth straight quarter by the end of June while WTI notched a second quarterly drop as the world's top two economies, the U.S.

and China, lost speed in the second quarter. Fears of a further slowdown hurting fuel demand grew after data on Friday showed U.S. inflation still outpacing the central bank's 2% target and stoked expectations it would hike interest rates again.

«Hawkish commentary on rates continues to raise concerns of the demand outlook weighing on prices,» National Australia Bank analysts said in a note. Higher interest rates could strengthen the greenback, making commodities more expensive for holders of other currencies, and also dampen oil demand. Later on Monday, Caixin will release its monthly private sector manufacturing PMI survey for China in June which is expected to drop slightly from May.

Economists and analysts have lowered their Brent price forecasts to average at $83.03 a barrel in 2023, in the June Reuters oil poll. Still, some analysts expect supplies to tighten and push prices higher in the second half after top exporter Saudi Arabia pledged an extra 1 million barrels per day output cut in July, while the U.S. is gradually replenishing its Strategic Petroleum Reserve.