Crude oil prices edge lower in early trade

12 Jun 2023 , 10:05 AM

In an effort to determine the Federal Reserve’s willingness to raise interest rates further, investors tried to assess oil prices on Monday as the market was weighed down by worries about the expansion of China’s fuel demand and the expanding Russian crude supply.

Brent crude futures were down 29 cents, or 0.4%, to $74.50 per barrel. American West Texas Intermediate (WTI) crude was down 24 cents or 0.3% at $69.93 a barrel.

Last week, both benchmarks saw their second consecutive weekly decline as disappointing economic data from the world’s largest crude importer, China, raised doubts about the growth of demand. This offset a boost in prices from Saudi Arabia cutting an additional 1 million barrels per day (bpd) from production in July.

Most market players anticipate that the US Federal Reserve will maintain current interest rates when its two-day monetary policy meeting ends on Wednesday. Fed-rate increases have made goods denominated in dollars more expensive for holders of other currencies, negatively impacting prices.

Regarding supply, Blanch noted that despite Saudi Arabia’s promises to cut oil output four times in the previous year, Russian supply has kept steady due to sanctions that were designed to have little effect on output.

Despite the EU embargo and the G7 price restriction mechanism, which went into effect in early December, Russian oil exports to China and India have increased.

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