Singapore, Sept. 13 (BNA): Oil prices fell in volatile trading on Tuesday as investors feared a drop in demand in China, the world’s largest importer of crude, and other increases in US and European interest rates, offsetting concerns about tight fuel supplies ahead of winter. .
Brent crude was down 34 cents, or 0.4 percent, at $93.66 a barrel by 04:45 GMT, while West Texas Intermediate crude was down 20 cents, or 0.2 percent, at $87.58 a barrel. Both contracts fell more than $1 earlier in the session, cutting a three-day high.
COVID-19 restrictions in China, the world’s second-largest oil consumer, have renewed concerns about declining global fuel demand, according to Reuters.
An official media report said Monday that the number of trips taken during the three-day Mid-Autumn Festival in the country has fallen by more than a third compared to last year, as the country’s no-coronavirus policy discourages people from traveling.
“Extensive coronavirus shutdowns and mass testing in China are impacting oil markets due to demand concerns,” said Tina Ting, analyst at CMC Markets. In addition, the odds of the Federal Reserve staying on raising interest rates will be boosted if the US CPI comes in higher than expected.
US Consumer Price Index (CPI) data is due at 12:30 GMT on Tuesday, and while expectations are that core inflation may show a peak, the European Central Bank and Federal Reserve are ready to raise interest rates further to tackle inflation.
This can raise the value of the US dollar against other global currencies and make dollar-denominated oil more expensive for investors.
Concerns about shrinking inventories contributed to supporting prices.
In the United States, the Strategic Petroleum Reserve fell by 8.4 million barrels to 434.1 million barrels in the week ending September 9, the lowest level since October 1984, according to data released Monday by the Department of Energy.
US President Joe Biden in March laid out a plan to release 1 million barrels per day over six months from the strategic reserve to tackle high US fuel prices, which have contributed to inflation.
A preliminary Reuters poll showed on Monday that US commercial oil stocks are expected to decline for five consecutive weeks, to fall by about 200,000 barrels in the week ending Sept. 9.
The American Petroleum Institute (API), an industry group, will release its inventory report at 4:30 PM ET (20:30 GMT) on Tuesday. The US Energy Information Administration (EIA) reports at 10:30 a.m. EDT (14:30 GMT) on Wednesday.
The prospects for reviving the nuclear deal between the West and Iran remained bleak. Germany on Monday expressed regret that Tehran had not responded positively to European proposals to revive the 2015 accord.
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