Oil prices snap 2-week win streak as demand concerns linger
Investing.com-- Oil prices settled lower Friday, snapping a two-week win streak amid fresh concerns that higher for longer U.S. interest rate regime will stifle global growth and crude demand.
By 14:30 ET (19.30 GMT), the U.S. crude futures fell 2.7% to settle $76.49 a barrel and the Brent contract dropped 2.3% to $81.71 a barrel.
A string of weak economic readings from across the globe spurred more concerns over slowing demand, especially after data released last week showed the U.K. and Japan both entering recessions in the fourth quarter.
Expectations of higher-for-longer U.S. interest rates also weighed on the outlook for crude demand, as several signals from the Federal Reserve showed the bank was in no hurry to begin trimming interest rates.
Federal Reserve Governor Christopher Waller reiterated the chorus of higher for longer interest rates from several Fed officials this week, saying Thursday that central bank should delay its first rate cut by at least a couple more months to see if a recent uptick in inflation signals stalling progress toward price stability.
Investors continued to push back their bets on sooner rate cuts, with Goldman Sachs becoming the latest bank to say that they no longer think the U.S. Federal Reserve will move to slash interest rates at its policy meeting in May.
The higher for longer interest rate regime is expected to keep a lid on economic growth, potentially weighing on crude demand.
The number of oil rigs operating in the U.S. rose by 5 to 503, the first decline in ten weeks, from 236 last week, according to data from energy services firm Baker Hughes, marking the first increase in nearly one month, as activity continues to recover following a hit from adverse weather.
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