U.S. Crude Futures and Brent Contract Experience Decrease
U.S. crude futures were down by 0.9% at $78.04 a barrel, and the Brent contract decreased by 0.9% to $81.83 a barrel.
OPEC Gains Disappear Amid Market Fluctuations
Despite both benchmarks rising over 1% on Monday, the previous week's 5% falls negated gains made following OPEC and its allies' surprise output reduction earlier this month.
Central Banks Expected to Raise Interest Rates to Combat Inflation
The Bank of England, the European Central Bank, and the U.S. Federal Reserve are all predicted to increase interest rates in the coming weeks to address persistently high inflation levels.
Rapid Monetary Policy Tightening Raises Recession Concerns
However, apprehensions are growing that the swift tightening of monetary policy might hinder economic growth, potentially causing a global recession and a severe hit to crude demand later in the year.
First Republic Bank's Customer Withdrawals Add Tension
The news of First Republic, a U.S. regional lender, suffering from $100 billion in customer withdrawals last month has intensified the situation. Smaller banks may restrict lending to conserve cash, further stifling economic activity.
Morgan Stanley Analysts: 2023 EPS Expectations Too High
Morgan Stanley analysts noted on Monday that the current business cycle continues to slow down and that consensus EPS expectations for 2023 are considered too high.
Chinese Travel Bookings Show Signs of Recovery
On a positive note, Tuesday saw a recovery in bookings for trips abroad from China during the upcoming May Day holiday, following strict COVID-19 pandemic regulations.
Investors Hopeful for Travel Recovery Supporting Fuel Demand
Although still below pre-pandemic levels due to increased fares for long-haul flights, investors are optimistic that travel will bounce back quickly to help sustain fuel demand in the world's largest oil importer.
Iraq Oil Exports, OPEC+ Voluntary Cuts, and U.S. Crude Stocks
Iraq's northern oil exports show few signs of an imminent restart after a month-long halt. Meanwhile, OPEC+ producer group members are initiating voluntary cuts in May. Traders now await the American Petroleum Institute's data on last week's U.S. crude inventories, with an expected draw of about 1.7 million barrels.
Energy Information Administration Report Due Wednesday
The U.S. government's inventory report from the Energy Information Administration is scheduled to be released on Wednesday.
