After three consecutive days of gains, oil prices dipped on Tuesday as investors prepared for OPEC’s monthly outlook report, while concerns over Covid lockdowns in China would further dampen demand remained.
Early Tuesday in Asia, Brent oil futures dropped 1.3% to $92.98 a barrel, while U.S. West Texas Intermediate Futures lost nearly 1% to $86.91 a barrel.
WTI slipped below $88 per barrel in a turmoil session that followed a three-day rally of around 7% as the US dollar declined.
Crude prices rebounded from seven-month lows last week, as investors anticipated that additional supply tightening by Russia, combined with an energy crisis in Europe, could raise prices later this year.
But worries over slowing economic activity and a strong dollar have cast doubts about demand in Asian markets, especially in China after the authorities imposed another set of Covid lockdowns and that have prompted a sharp decrease in oil imports this year.
Additionally, markets were also waiting for clarity on global demand from the Organization of Petroleum Exporting Countries (OPEC)’s monthly report. Despite last week’s agreement by the group to cut output by a symbolic amount, prices went nowhere.