Oil prices dipped on Tuesday, paring some gains from the previous session, as the market feared that more aggressive interest rates hikes from central banks may lead to a global economic slowdown and soften fuel demand.
Brent crude futures for October settlement dropped 81 cents, or 0.7%, to $104.28 a barrel by 0359 GMT after climbing 4.1% on Monday, the biggest increase in more than a month.
The October contract expires on Wednesday and the more active November contract was at $102.33, down 0.6%.
U.S. West Texas Intermediate crude was at $96.68 a barrel, down 33 cents, or 0.3%, following a 4.2% rise in the previous session.
Inflation is near double-digit territory in many of the world's biggest economies, a level not seen in close to a half-century, which could prompt central banks in the United States and Europe to resort to more aggressive interest rate hikes. read more
"Risk appetite has cooled over anticipation that the Federal Reserve would continue to increase interest rates...A pull-back of natural gas prices in Europe also adds uncertainties to the picture of the energy crisis," said analysts from Haitong Futures.
Also weighing on prices, Russia's oil output has exceeded expectations in the wake of the war in Ukraine, the head of the International Energy Agency (IEA) said on Monday. But he said that Moscow, which calls its actions in Ukraine "a special operation", will find it increasingly difficult to uphold production as Western sanctions bite.
IEA member nations could release more oil from strategic petroleum reserves (SPR) if they find it necessary when the current scheme expires, the head of the agency also said.
More about:
