Crude oil settles lower as US Fed rate hike worries balance tighter supplies
Crude last week jumped more than 6 per cent after OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, surprised the market with a new round of production cuts starting in May.
After rising for three straight weeks, crude oil prices settled lower on Monday, as concern about further interest rate hikes that could curb demand balanced the prospect of a tighter market due to supply cuts from OPEC+ producers.
The US dollar rose after jobs data pointed to a tight labour market, heightening expectations of another Federal Reserve rate hike. Dollar strength makes oil more expensive for other currency holders and can weigh on demand.
Brent crude settled down 96 cents, or 0.2%, at $84.58 a barrel while US West Texas Intermediate also fell 94, or 0.1%, to $79.74. Both benchmarks fell by more than $1 earlier in the session
Crude last week jumped more than 6 per cent after OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, surprised the market with a new round of production cuts starting in May.
State oil giant Saudi Aramco will supply full crude contract volumes loading in May to several North Asian buyers despite its pledge to cut output by 500,000 barrels per day, several sources with knowledge of the matter said on Monday.
Saudi Aramco's monthly allocation was being keenly watched by investors as an indicator of whether planned output cuts could tighten supplies in Asia, the world's biggest crude import market.
Oil also drew support from a steeper-than-expected drop in US crude inventories last week, as well as a decline in gasoline and distillate stocks, hinting at rising demand.
In global financial markets, a US inflation report to be released on Wednesday could help investors gauge the near-term trajectory for interest rates.
Also coming up are monthly reports from OPEC on Thursday and the International Energy Agency on Friday, which will update oil demand and supply forecasts.
With Reuters Inputs
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