Crude oil extended a two-day streak of losses today, with morning trade sending both Brent and West Texas Intermediate lower.
Bar a sudden reversal of fortunes, crude oil is in for a week of substantial losses, weighed down by weak U.S. economic data.
Prices are down even though the latest data from China suggested robust demand as GDP growth for the first quarter beat expectations.
"Market sentiment remained bearish after the weak U.S. economic data, along with expectations of interest rate hikes, fuelling worries over a recession that could dent oil demand," a Nissan Securities analyst told Reuters.
"WTI is expected to trade in the $75-$80 range for the next week as investors try to figure out if U.S. gasoline demand will increase toward the summer driving season, and if China's oil demand will really pick up in the second half of the year," he also said.
Bloomberg, meanwhile, cited traders as warning a technical correction would push oil prices even lower. The cause of the correction was the sudden and sharp increase in prices following OPEC+'s output cut announcement.
"Large technical chart gaps like we're seeing in the futures keep most traders very nervous," Dennis Kissler, senior vice president of trading at BOK Financial Securities, explained to Bloomberg. "After a gap like that occurs, more times than not, the market will migrate downwards."
Then there are the rate hikes that analysts expect central banks in the U.S., the UK, and the eurozone to announce early next month. Higher interest rates tend to boost currencies and make oil more expensive, which affects demand.
Speaking of oil demand, China is about to see demand slow down as refineries enter maintenance season. At the same time, economists polled by Reuters have suggested China may reduce fuel export quotas when it issues the next batch thanks to improving domestic demand that could reduce the need to export so much fuel as a way of propping up the economy.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More