Investors reacted to a potential hike in interest rates by the US Fed and weak Chinese manufacturing data.
World oil prices fell modestly on the first business day of the week according to economic data from the US and China. This was confirmed by the trading data on Monday, May 1.
Thus, Brent crude for July delivery on the London ICE Futures exchange fell by $1.61 (-2.00%) to $78.72 per barrel.
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In turn, futures for WTI crude for June delivery on the New York Mercantile Exchange fell $1.66 (-2.16%) to $75.12 a barrel.
Oil prices fell as investor concerns about the economic impact of a potential US Fed rate hike and weak Chinese manufacturing data were enough to override support for new OPEC+ output cuts , Reuters wrote.
US consumer spending was found to be flat in March, as a rise in spending on services was offset by a drop in spending on goods, but continued core inflationary pressures could see the Federal Reserve hike again of interest rates.
“The prospect of a further rate hike, to be announced by the Fed this week, is expected to increase short-term price volatility,” said Baden Moore, head of commodity and carbon strategy at the National Bank of Australia (NAB).
The Fed is expected to raise interest rates by another 25 bp this week. Since March last year, the US Central Bank has raised the discount rate by 475 bp. from near zero to the current range of 4.75%-5%.
The Reserve Bank of Australia is expected to continue its pause on rate hikes next week, and the European Central Bank could surprise with a massive half-point hike on Thursday.
Meanwhile, China’s Manufacturing Purchasing Managers’ Index (PMI) fell to 49.2 from 51.9 in March, official data showed on Sunday, falling below the 50-point mark that separates expansion and contraction on a monthly basis. basis.
It will be remembered that a week ago, the price of oil also dropped below $80. Then it came on the back of weak data on US stocks, sparking fears of a recession in the world’s largest economy.
Source: korrespondent
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