Brent oil futures fell 0.9% to $85.65 a barrel after rising 2.2% on Friday. US West Texas Intermediate oil fell 0.9% to $78.99 a barrel after rising 2.1% in the previous session.
“Crude oil prices are down as traders anticipate a potential weakening of the crude oil demand outlook as a major inflation report could force the Fed to tighten policy much more aggressively,” Edward Moya, senior analyst at OANDA, said, referring to consumer price data. in the US, due on February 14th.
The US Federal Reserve is raising interest rates to curb inflation, raising fears that the move will slow economic activity and demand for oil.
In addition, the resumption of Azerbaijani oil exports on Sunday at the Turkish terminal in Ceyhan also removed concerns about supplies, said Tina Teng, an analyst at CMC Markets.
The terminal was damaged in the devastating earthquakes in Turkey and Syria last week. This is a place for storage and loading of pipelines carrying oil from Azerbaijan and Iraq.
Oil prices rose on Friday, Feb. 10, after Russia, the world’s third-largest oil producer, said it would cut crude oil production in March by 500,000 barrels per day, or about 5% of production, in response to Western restrictions on its export, which were introduced after the invasion of Ukraine.
Brent and WTI contracts rose more than 8% last week on optimism about a recovery in demand in China, the world’s largest crude oil importer and second oil consumer, after COVID restrictions were lifted in December .
A recovery in China’s oil demand is holding back gasoline exports in February, although its refineries are maintaining diesel shipments above 2m tonnes.
Stefano Grasso, senior portfolio manager at 8VantEdge in Singapore, said the 500,000 bpd cut would put Russia back in line with its OPEC+ quota as Moscow is currently over-exporting.
The Organization of the Petroleum Exporting Countries (OPEC) and their allies, including Russia, the OPEC+ group, agreed in October to cut production by 2 million barrels per day, about 2% of global demand.
