Oil prices decline as economic growth concerns offset Opec+ cuts

Oil fell on Monday as concern over the economic impact of the US Federal Reserve potentially raising interest rates and weaker Chinese manufacturing data outweighed support from Opec+ supply cuts taking effect this month.
 

The Fed, which meets on May 2-3, is expected to increase interest rates by ano­ther 25 basis points. The US dollar rose against a basket of currencies on Monday, making oil more expensive for other currency holders. Brent crude fell 97 cents, or 1.2 per cent, to $79.36 a barrel by 1712 hrs (India time), while US West Texas Intermediate (WTI) crude slid $1.44, or 1.9 per cent, to trade at $75.34.
 

 

“The failure to reach more solid ground above $80.50 in Brent points to continued selling interest amid the well known gro­wth/ demand concerns,” said Ole Han­sen, head of commodity Strategy at Saxo Bank.
 

Banking fears have weighed on oil in recent weeks and in what is the third major US institution to fail in two months, United States regulators said on Monday First Republic Bank has been seized and a deal agreed to sell the bank to JPMorgan.
 

“Investors are afraid that if the Fed continues to raise interest rates as expected, what will happen to the US financial system’s other problem children?,” said Naeem Aslam of Zaye Capital Markets, who added a hike of at least 25 basis points this week was still expected. Reuters