Oil fell for a fourth straight day as macroeconomic concerns overshadowed physical market tightness to cloud the demand outlook.
West Texas Intermediate traded near $88 a barrel after declining by 2.2% in the previous session. A rout in Treasuries intensified on Monday and the dollar strengthened as traders digested messaging that the Federal Reserve will need to leave borrowing costs higher for longer to rein in stubborn inflation.
Oil has now dropped almost 6% since last Wednesday’s close on fears over the global economy, halting a rally that saw WTI surge by 29% last quarter on tight supply. Higher interest rates make it more expensive to store and ship crude and the strengthening dollar means it’s more expensive for most buyers.
Turkey said a key pipeline bringing oil from northern Iraq to the Mediterranean coast could resume this week, which would potentially put more downward pressure on oil, although an Iraqi official cast doubt on that timetable.
Citigroup Inc. forecast Brent crude will fall to the low $70s per barrel next year as the market swings back to a surplus. Demand looks constrained and there’s more oil coming into the market from non-OPEC+ suppliers, it said in a note.
To get Bloomberg’s Energy Daily newsletter into your inbox, click here.
