Oil prices slid on Monday as recent economic data from the US, the world’s largest oil consumer, suggests that the US Federal Reserve will maintain its hawkish stance on interest rates, supporting the dollar near multi-week highs.
International benchmark Brent crude traded at $82.31 per barrel at 9.58 a.m. local time (0658 GMT), down 0.62% from the closing price of $82.82 a barrel in the previous trading session.
At the same time, American benchmark West Texas Intermediate (WTI) traded at $75.91 per barrel, a 0.54% decrease after the previous session closed at $76.32 a barrel.
The 0.6% monthly increase in the US core personal consumption expenditures price index in January, up from a 0.4% monthly gain in December and higher than the market estimate of a 0.4% increase, increased investor fears of interest rate hikes for at least the first half of this year, weighing on oil prices.
These fears of a rate hike have led to a stronger dollar, putting more pressure on dollar-indexed oil prices.
The US dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc, rose 0.11% to 105.29.
Despite supply concerns, price declines emerged after Russia announced a plan to cut crude oil production by 500,000 barrels per day in March.
Russian Deputy Prime Minister Alexander Novak also said earlier in February that his country plans to sell 80% of its crude oil and condensate and 75% of its refined products to ‘friendly’ countries, Novak said.
