Oil down over demand uncertainties in world’s biggest consumers

Oil prices decreased on Tuesday over demand uncertainties in the world’s largest oil consumers, the US and China.

International benchmark Brent crude traded at $84.12 per barrel at 10.03 a.m. local time (0703 GMT), a fall of 0.15% from the closing price of $84.25 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $79.58 per barrel at the same time, a 0.18% drop from the previous session that closed at $79.72 per barrel.

Ongoing uncertainties over the timing of the US Federal Reserve’s (Fed) interest rate cut continue to raise demand concerns.

The Fed announced its monetary policy decisions and economic projections last week. The bank did not change the policy rate in line with expectations and kept it constant at 5.25–5.50%.

Following the meeting, Fed Chairman Jerome Powell said the timing was not right to start easing monetary policy.

Although inflation in the US showed signs of slowing down, the Fed reduced its interest rate cut forecast for this year from three to one.

Experts believe that keeping interest rates at high levels for a sustained period may pose risks to the oil demand outlook.

Moreover, oil refinery production in China decreased for the second consecutive month and fell to the lowest level of the year.

Production fell by 1.8% in May compared to last year, according to the National Bureau of Statistics.

The decline was driven by planned maintenance work and rising crude oil costs which puts pressure on processing margins.

• The American benchmark West Texas Intermediate (WTI)
• US Federal Reserve's (Fed)