Crude oil prices deepened their decline by more than 5%, at the end of today, Tuesday, May 2 (2023), in light of expectations of an increase in US interest rates, and weak economic data from China.
Brent and West Texas Intermediate crude prices fell for the third consecutive session, with expectations of a decline in oil demand in China and increasing concerns about the banking sector, according to Reuters.
Crude oil prices witnessed weekly losses, last Friday, with a decline to less than $80 a barrel of Brent crude, at the end of last week’s trading, according to information seen by the specialized energy platform.
Crude oil prices today
At the end of the session, futures contracts for Brent crude, for delivery in July 2023, fell by 5%, to record $ 75.32 a barrel.
US West Texas Intermediate crude futures, for June 2023 delivery, also fell by 5.3%, to record $71.66 a barrel, the lowest level since last March.
It is noteworthy that Brent and West Texas crude fell by more than a full dollar during the last session in yesterday’s transactions, Monday, May 1, according to the data monitored by the specialized energy platform.
By the end of last week’s trading, on Friday, April 28, Brent and West Texas crude futures fell below $80 a barrel and $73 a barrel, respectively.
Crude oil price analysis
Analyst at CMC Markets, Tina Ting, said that the negative pressure on oil is caused by the fact that the Chinese economic recovery is not really promising, which casts a shadow on the expectations of fuel consumption demand.
And she pointed out that official data released on Sunday, April 30, shows that Chinese manufacturing activity declined unexpectedly over the past month, which is the first contraction since December 2022 in the manufacturing PMI.
The expert explained that the industrial and economic recovery in China from the Corona pandemic was expected to boost demand this year, according to statements monitored by the specialized energy platform.
However, there are positive signs of recovery despite the weak manufacturing data in China, highlighted by spending operations during the Labor Day holiday, which lasted about 5 days in the world’s largest oil importer, according to ANZ Research analysts.
At the same time, and in a related context, an opinion poll showed, yesterday, Monday, the possibility of a decrease in the US strategic oil stock for the third week, which provides some support to the markets.
The US Federal Reserve, which will meet today and tomorrow, is expected to raise interest rates by another 25 basis points.
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