ALBAWABA – Oil prices slipped Tuesday on concerns over further interest rate hikes in the United States (US) weighing on demand, news agencies reported.
Brent crude slipped $0.19 to $84.23 a barrel by 0640 GMT, according to Reuters, while West Texas Intermediate (WTI) crude shed $0.24 to settle at $79.86.
Bloomberg reported WTI oil prices steadying near their levels at the beginning of the year.
Demand concerns outweighed those stemming the tropical storm off the US Gulf Coast impacting supply, according to Reuters.
Meanwhile, Reuters’ investors are looking to key US economic data coming out later this week to help them determine the path of interest rates this year and the next.
Focus will also be on the US personal consumption expenditures price index report, due Thursday, and the August nonfarm payrolls data on Friday, Reuters reported.
Federal Reserve Chair Jerome Powell on Friday said the U.S. central bank may need to raise rates further to cool stubborn inflation. But he gave assurances that the Fed will likely pin US interest rates in September.
There are speculations that the US will ease sanctions on Iran and Venezuela to relieve the oil market and offset OPEC+ cuts - Shutterstock
Powell’s remarks drove oil prices up over the past three days, with the WTI gaining 1.5 percent, marking its longest winning run since late July, according to Bloomberg.
Markets anticipate an 80 percent chance that the Fed will pin rates next month, Refinitiv's FedWatch tool showed. But the probability of a rate hike in November is now seen at roughly 56 percent, Reuters reported.
Meanwhile, China’s biggest refiner, Sinopec, said that the country’s product demand in the second half would expand at a slower pace than in the first.
Oil prices are headed for a small monthly loss so far, after jumping in July as supply curbs from the Organization of Petroleum Exporting Countries and its allies tightened the market. Namely, Saudi Arabia and Russia.
However, speculations that the US could ease sanctions against Venezuela and Iran undermine the long-term expected impact of ongoing supply cuts, as it would increase global flows. Meanwhile, China oil imports from Iran are expected to reach historical highs this year.
Additionally, Turkey said it was about to conclude technical work on a key Iraqi pipeline, aiming to make it operational again as soon as possible, Energy Minister Alparslan Bayraktar said.
