Oil prices fall in early trade

25 Apr 2023 , 08:47 AM

As investors weighed the possibility of slowing economic growth overseas with rising interest rates with high holiday travel in China that might boost gasoline demand, oil prices declined in early trade on Tuesday, trimming gains from the previous session.

U.S. West Texas Intermediate crude dropped 6 cents to $78.70 a barrel, while Brent crude dropped 7 cents to $82.66.

On Monday, oil futures increased by more than 1% on hopes that holiday travel in China will boost demand in the largest oil-importing nation.

Travel to Asian nations is still recovering, according to reservations made in China for travels there over the forthcoming May Day holiday. Despite this, the numbers are still significantly below pre-COVID-19 levels due to rising long-haul costs and a lack of available flights.

Investors are still concerned that the US, UK, and EU central banks may raise interest rates to combat inflation, which may impede economic development and reduce energy demand.

When they meet in the first week of May, the U.S. Federal Reserve, the Bank of England, and the European Central Bank are all anticipated to hike interest rates.

Investors expected industry data on American oil stockpiles on Tuesday. According to Reuters’ poll of analysts, U.S. oil stocks should have decreased by around 1.7 million barrels in the week ending April 21. 

On Wednesday, U.S. government inventory data is due.

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