Oil prices sink as demand fears overtake OPEC-led rally
NEW YORK: Oil prices fell on Tuesday as concern returned about the prospect of more interest rate hikes and Covid-19 lockdowns weakening fuel demand, reversing a two-day rally on OPEC+’s first output target cut since 2020.
Brent crude was down $2.89, or 3%, to $92.85 at 12:54 p.m. EDT (1655 GMT). U.S. West Texas Intermediate (WTI) fell from Monday’s trading to $86.84, down 3 cents from Friday’s close.
The U.S. benchmark has been trading since Sunday without settlement due to the Labor Day holiday. WTI prices are down more than 3% from the usual time of settlement on Monday, Refinitiv Eikon data shows.
“The OPEC+ news is now in the market and the focus has temporarily shifted to economic and inflationary concerns amongst which the two relevant factors are the extended Covid lockdowns in China and Thursday’s ECB rate decision,” said Tamas Varga of oil broker PVM.
