- WTI Oil price extended losses as Fed officials indicated higher interest rates for longer, which could dampen Oil demand.
- The crude Oil prices received pressure as China’s lower PPI indicated persistent sluggishness in business demand.
- Iraq's Oil minister Hayan Abdul Ghani committed to the voluntary Oil production cuts agreed upon by the OPEC.
West Texas Intermediate (WTI) crude Oil price have experienced a second consecutive decline, trading around $77.70 per barrel during Monday's Asian session. This downward trend in Oil prices could be attributed to uncertainties surrounding crude Oil demand.
US Federal Reserve (Fed) officials have indicated that interest rates could remain elevated for an extended period, potentially impacting growth and reducing Oil demand in the United States (US), the world's largest Oil consumer. Moreover, Friday's release of the US Consumer Sentiment Index added to evidence suggesting a slowdown in the economy. The index declined to 67.4 in May from April's 77.2, hitting a six-month low and falling short of market expectations.
As reported by Reuters, Neel Kashkari, President of the Minneapolis Federal Reserve (Fed), shared concerns regarding the degree of tightness in monetary policy. In an interview with CNBC on Friday, Kashkari acknowledged that while the criteria for another rate hike are stringent, they cannot be entirely discounted. Additionally, San Francisco Fed President Mary Daly emphasized the importance of sustaining a prolonged restrictive policy to achieve the Federal Reserve's inflation goals.
Moreover, China witnessed another decline in its Producer Price Index (PPI), registering a 2.5% drop. This marks the 19th consecutive month of deflation, indicating persistent sluggishness in business demand in the largest Oil-importing nation. This exerts additional downward pressure on Oil prices.
In the Middle East, as reported by Reuters citing the Iraqi state news agency, Hayan Abdul Ghani, Deputy Prime Minister for Energy Affairs and Minister of Oil of Iraq, affirmed Iraq's commitment to the voluntary Oil production cuts agreed upon by the Organization of the Petroleum Exporting Countries (OPEC). Ghani also expressed Iraq's readiness to cooperate with fellow member nations in endeavors aimed at fostering greater stability in the global Oil markets.
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