Oil prices extended losses in Asian trading on Tuesday. It is predicted that US inflation will continue and high interest rates will suppress consumer and industrial demand.
Brent crude futures were down 57 cents, or 0.68%, at $83.14 a barrel by 0613 GMT. WTI fell 58 cents, or 0.73%, to $79.22 a barrel.
Both indicators fell below 1 percent on Monday as Federal Reserve officials said they were waiting for more signs that inflation would slow before considering interest rate cuts.
Fears of weak demand led to the sell-off as the possibility of a Fed rate cut receded.
Comments from Fed officials indicated that interest rates will remain high for longer than markets expect. This has implications for the oil market, as high borrowing costs tie up funds and hit economic growth and demand for crude oil.
Hard-line Iranian President Ibrahim Raisi, a potential successor to Supreme Leader Ayatollah Ali Khamenei, died in a helicopter crash on Sunday. Separately, Saudi Arabia’s Crown Prince Mohammed Bin Salman postponed his trip to Japan due to the health condition of his father, the king.
However, the market was not much affected by the political uncertainty in the two major oil-producing countries. The death of the Iranian President and the health problem of the Saudi king do not seem to affect the market much.
OPEC+ members are scheduled to meet on June 1 to determine production policy, including whether their voluntary cuts of 2.2 million barrels per day will be extended. Investors are focusing on supply from OPEC+.
Prices are waiting for a catalyst to break the current range; All eyes are on geopolitical developments and this week’s oil stock data.
OPEC+ may extend some voluntary production cuts if demand does not recover, people with knowledge of the matter previously told.
