NEW YORK: Oil prices settled lower on Monday (April 10), after rising for three straight weeks, 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 US 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 US$84.58 (RM372.87) a barrel while US West Texas Intermediate also fell 94, or 0.1%, to US$79.74 (RM351.53). Both benchmarks fell by more than $1 earlier in the session
“We look for this week’s trade to be heavily influenced by inflation data featured by Wednesday’s CPI and Thursday’s PPI that will likely revive the spectre of higher interest rates that could strengthen the US dollar,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
Crude last week jumped more than 6% 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.
Oil also drew support from a steeper-than-expected drop in US crude inventories last week, as well as a decline in petrol 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. – Reuters