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Oil prices fell early on Monday, weighed down by an overall gloomy market sentiment about the economy, a stronger U.S. dollar, and mixed data out of China.
The global markets continue to focus on the possibility of a slump in oil demand amid rising signs of weakening economies and the potential for further weakness ahead as the Fed and other central banks continue on the path of aggressive interest rate hikes to curb inflation.
Philadelphia Federal Reserve President Patrick Harker said last week that “we are going to keep raising rates for a while.”
“Given our frankly disappointing lack of progress on curtailing inflation, I expect we will be well above 4 percent by the end of the year,” Harker said in a speech at the Greater Vineland Chamber of Commerce in New Jersey.
At the start of this week, oil prices were lower as market participants were looking at macroeconomic data and upcoming central bank meetings.
“With important central bank meetings ahead, the oil market will likely trade on risk sentiment and the U.S. dollar this week,” Jens Pedersen, a senior analyst with Danske Bank, told Bloomberg.
In China, increased fuel export quotas and robust export demand pushed its overseas shipments of refined products surging by 36% annually in September to the highest level since June last year.
China, however, saw its crude oil imports drop by 2% year over year in September, to around 9.79 million barrels per day (bpd), according to data from the Chinese General Administration of Customs cited by Reuters. Yet, the crude import volumes were higher than the August 2022 intake of 9.5 million bpd, the data showed.
The decline in oil prices early on Monday was also dragging lower the major stock markets in the Middle East. The Saudi stock exchange was on track to close down after two consecutive trading sessions of gains.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.