Oil extends losses on cautious interest rate outlook

REUTERS: Oil prices fell yesterday, extending losses on market views that higher than expected inflation could delay cuts to high interest rates that have been capping growth in global fuel demand.
Brent crude futures fell 46 cents, or 0.6 percent, to US $ 81.16 a barrel by 1210 GMT. U.S. West Texas Intermediate crude futures (WTI) were down 40 cents, or 0.5 percent, at US $ 76.09.
The dip extended losses registered last week, when Brent lost about 2 percent and WTI fell more than 3 percent on signs that the U.S. Federal Reserve is in no rush to cut interest rates.
“With inflation stubbornly hovering well above the Fed’s 2 percent target and the U.S. economy showing a resilience few had predicted, the markets moved to price in a scenario where interest rates remain high for longer,” said ActivTrades senior analyst Ricardo Evangelista.

Oil prices have been trading between US $ 70 and US $ 90 a barrel since November as rising U.S. supply and concern over weak Chinese demand offset OPEC+ supply cuts despite two wars raging in Ukraine and Gaza.
As the Israel-Hamas conflict continues in the Middle East, White House national security adviser Jake Sullivan told CNN on Sunday that negotiators for the United States, Egypt, Qatar and Israel had agreed on the basic contours of a hostage deal during talks in Paris but are still in negotiations.
The geopolitical risk premium on Brent crude from by Yemeni Houthis on ships in the Red Sea remained modest at only a US $ 2 a barrel, Goldman Sachs analysts said in a note.