Oil fell below $68 a barrel as markets struggled to shake off concerns that higher interest rates will weigh on the global growth outlook.
(Bloomberg) — Oil fell below $68 a barrel as markets struggled to shake off concerns that higher interest rates will weigh on the global growth outlook.
West Texas Intermediate fell more than 2%. After several policymakers struck a hawkish tone on interest rates last week, the president of the European Central Bank said it probably won’t be able to declare the end of its historic interest-rate hiking cycle any time soon.
Key nearby timespreads, which help gauge the health of the market, fell deeper into a bearish contango structure on Tuesday, indicating oversupply.
Oil in New York remains on track for its first back-to-back quarterly losses since 2019, in part due to headwinds from China’s lackluster economic recovery and aggressive monetary tightening from the US Federal Reserve. Resilient Russian crude exports have added to the pressure on prices, which have been near current levels since early May.
“Oil is well and truly stuck and rangebound, taking all the news on the chin,” said Ole Hansen, head of commodities strategy at Saxo Bank. “Now we are back to looking out for additional China stimulus and the US yield curve, given the signal it’s sending regarding recession risks.”
Chinese Premier Li Qiang said Tuesday that the government would roll out more practical, effective measures to boost domestic demand, but those promises were largely reiterations of prior statements made by officials.
To get Bloomberg’s Energy Daily newsletter direct into your inbox, click here.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.