Oil prices fell on Monday as investors feared weak demand after the US Federal Reserve signaled another rate hike, despite better-than-expected consumer price index data released last week.
International benchmark Brent crude traded at $95.84 per barrel at 10.40 a.m. local time (0741GMT), a 0.15% decrease from the closing price of $95.99 a barrel in the previous trading session.
The American benchmark West Texas Intermediate (WTI) traded at $88.70 per barrel at the same time, a 0.29% fall after the previous session closed at $88.96 a barrel.
Last week, the US consumer price index (CPI), which measures changes in the prices of goods and services from the perspective of consumers, signaled a slowdown in inflation, reassuring investors that the Fed may ease up on interest rate hikes in the coming months.
Despite positive consumer price data released last week, Federal Reserve Governor Christopher Waller warned on Monday that the inflation fight is far from over and that interest rates will 'continue to rise.'
Since March, the Fed has raised interest rates by 375 basis points in an effort to control price pressures. Prior to that, interest rates reached a 25-basis-point high as the central bank reduced rates to near zero following the global outbreak of the coronavirus pandemic in 2020.
Dollar-indexed oil prices came under further pressure from the rising value of the greenback.
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 0.50% to 106.69.
China's strict 'zero-COVID' policy, which uses immediate lockdowns, widespread testing, intensive contact tracing, and quarantines to eliminate infections as soon as they arise, has had a significant negative impact on the country's economy.
The country took a positive step toward easing pandemic measures on Friday by shortening the quarantine period for visitors to China and lifting some restrictions on international flights. However, because there is no clear indication of when the country will end its pandemic policy, prices remain under pressure.
By Sibel Morrow
Anadolu Agency
energy@aa.com.tr