Oil extends losing streak amid fears that Fed hike will weaken fuel demand

Oil pump cranes at the Vaca Muerta oil and shale gas field in the Patagonian province of Neuquén, Argentina, Jan. 21, 2019. REUTERS/Agustin Markarian/File Photo

TOKYO (Reuters) – Oil prices fell on Monday to extend a recent string of losses amid concerns that an expected rise in US interest rates could dampen demand for fuel.

Brent crude futures for September settlement fell 67 cents, or 0.7 percent, to $102.53 a barrel by 0421 GMT, down for a fourth day.

US West Texas Intermediate (WTI) crude futures for September delivery fell 77 cents, or 0.8%, to $93.93 a barrel, also down for a fourth day.

Both gave up early gains.

Tetsuo Emori, CEO of Emori Fund Management Inc.

“The slow recovery in the Chinese economy is weighing on market sentiment,” he said.

Oil futures have been volatile in recent weeks as traders have tried to juggle the prospects of an interest rate hike, which could limit economic activity and thus reduce fuel demand growth, against a supply shortage from disruptions in the circulation of Russian barrels due to Western sanctions in central Ukraine. conflict.

Federal Reserve officials indicated that the central bank is likely to raise interest rates by 75 basis points at its meeting on July 26-27.

China, the world’s second-largest economy, barely missed the contraction in the second quarter, posting just 0.4% year-on-year growth, weighed down by the COVID-19 lockdown, weak real estate and cautious consumer sentiment. Read more

“The market tone is likely to remain bearish as well due to concerns that the resumption of some Libyan crude oil production will ease tight global supplies,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co., Ltd.

In a statement early on Saturday, the National Oil Corporation said that on the supply side, the National Oil Corporation aims to restore production to 1.2 million barrels per day within two weeks.

The European Union said last week that it would allow Russian state-owned companies to ship oil to third countries under an amendment to sanctions agreed by member states last week aimed at reducing risks to global energy security. Read more

But the governor of the Russian Central Bank, Elvira Nabiullina, said on Friday that Russia would not supply oil to countries that decided to impose a price ceiling on its oil. Read more

(Reporting by Yuka Obayashi) Editing by Christian Schmolinger and Bradley Peret

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