LONDON: Oil prices slipped a little on Monday amid speculation that stronger than expected inflation could delay cuts to high interest rates that have been capping growth in global fuel demand.
Brent crude futures were down 20 cents, or 0.3%, to $81.42 a barrel at 1415 GMT. U.S. West Texas Intermediate crude futures (WTI) were down 13 cents, or 0.2%, at $76.36.
The dip extended losses registered last week, when Brent lost about 2% and WTI fell more than 3% on signs that the US Federal Reserve is in no rush to cut interest rates.
“With inflation stubbornly hovering well above the Fed’s 2% 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 $70 and $90 a barrel since November as rising U.S. supply and concern over weakChinese demand offset OPEC+ supply cuts despite 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 were still in negotiations.
The geopolitical risk premium on Brent crude from attacks by Yemeni Houthis on ships in the Red Sea remained modest at only a $2 a barrel, Goldman Sachs analysts said in a note.
However, the bank has raised its summer peak price projection to $87 a barrel, up from $85, after Red Sea disruptions have driven larger than expected draws in stocks held by developed countries.
Goldman Sachs still expects oil demand to increase by 1.5 million barrels per day (bpd) in 2024 but has cut its forecast for China while raising projections for the United States and India.