By Ambar Warrick
Investing.com — Oil prices fell in early Asian trade on Monday and were moving close to a five-week low as concerns over rising interest rates and slowing economic growth largely dented expectations for a recovery in demand this year.
Mixed signals on global manufacturing activity further unsettled markets, with readings from the and showing a sustained decline. While U.S. grew more than expected in April, analysts warned that this could likely feed into inflation.
Concerns over more U.S. interest rate hikes also weighed heavily on oil markets, as the recovered some lost ground and uncertainty persisted over when the Federal Reserve will .
Crude markets saw their first weekly loss in five weeks, with prices once again close to falling below the $80 a barrel level.
futures fell 0.6% to $80.97 a barrel, while futures fell 0.6% to 77.39 a barrel by 21:46 ET (01:46 GMT). Both contracts lost about 5% last week.
A price boost from an unexpected production cut by the Organization of Petroleum Exporting Countries and allies (OPEC+) now appears to have largely worn off, with oil prices having reversed a bulk of their gains in recent weeks.
While supply is set to tighten as the OPEC+ cuts take hold in May, markets fear that worsening demand will result in less tighter than expected conditions. A swathe of weaker-than-expected U.S. corporate earnings also furthered this notion, reflecting the impact of high interest rates on business activity.
Focus this week is on and GDP data for the first quarter of 2023, which is expected to show that growth slowed from the prior quarter.
The first week of May will also see a string of central bank rate decisions, with the and both expected to hike rates further to combat inflation.
This trend is expected to result in slowing economic growth this year, potentially denting crude demand despite a recovery in major importer China. Recent data showed that the country imported record amounts of crude in March, as it reopens after three years of COVID lockdowns.
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