Brent falls on fears of a global economic slowdown

By Sudarshan Varadhan and Yuka Obayashi

Feb. 21 (Reuters) – Brent oil prices fell on Tuesday on fears that a global economic slowdown could reduce demand for fuel, prompting investors to take profits after the previous day’s gains.

Traders await the minutes of the Federal Reserve’s latest meeting, scheduled for Wednesday, after the latest core inflation data raised the risk that interest rates will stay higher for longer.

Brent crude was down 66 cents, or 0.8%, at $83.41 a barrel at 0750 GMT. U.S. West Texas Intermediate (WTI) March crude futures, due Tuesday, rose 4 cents, or 0.1%, to $76.38.

WTI futures did not settle on Monday as it is a US holiday. The April WTI contract, currently the most active, rose 23 cents to $76.78.

“Brent has been in the mid-range of $78-88 a barrel since late December, with some investors taking profits on fears of further U.S. rate hikes, while others were bullish on hopes of a a recovery in demand in China,” Satoru said. Yoshida, commodities analyst at Rakuten Securities.

“The market is likely to remain rangebound until there are clearer signals on the future direction of US monetary policy and the path to economic recovery in China,” he added.

With China’s oil imports set to hit a record high in 2023 and demand from India, the world’s third-largest oil importer, increasing amid tight supply, all eyes are now on the monetary policy of the United States, the largest economy in the world and the largest consumer of oil.

Some analysts believe that oil prices could rise in the coming weeks due to tight supply and a rebound in demand, despite rising US interest rates.

“Chinese demand for Russian crude has returned to levels at the start of the war in Ukraine,” said Edward Moya, an analyst at OANDA.

“The West will try to pressure China and India not to look for other sources, which should keep the oil market tight,” Moya said.

Russia plans to cut oil production by 500,000 barrels a day in March, about 5% of output, after the West imposed price caps on Russian oil and petroleum products.

Although the Organization of the Petroleum Exporting Countries (OPEC) earlier this month raised its forecast for global oil demand growth through 2023, its monthly report showed crude production in January fell. in Saudi Arabia, Iraq and Iran under the organization’s agreement. .

(Reporting by Sudarshan Varadhan in Singapore and Yuka Obayashi in Tokyo. Editing by Jamie Freed, Christian Schmollinger and Kim Coghill, Spanish editing by José Muñoz at the Gdańsk newsroom)