Oil: Oil prices slide on US inflation concerns

BEIJING (Reuters) – Oil prices fell early on Friday as high U.S. inflation stoked concerns over aggressive interest rate hikes and investors await the outcome of U.S.-Iranian talks that could lead to a hike. of the world’s crude oil supply.

Brent crude futures fell 40 cents, or 0.4%, to $91.01 a barrel at 0140 GMT, while US West Texas Intermediate crude fell 25 cents, or 0.3% , at $89.63 a barrel.

Benchmark oil prices are also in line for their first weekly decline after seven straight weekly gains, although both contracts previously hit a seven-year high.

Rising crude prices have finally petered out as optimism grows that Iran nuclear deal talks are heading in the right direction and the dollar is recovering as currency markets begin to price a oversized Fed hike,” said Edward Moya, senior market analyst. at the OANDA brokerage.

“The oil market is still very tight, but the exhaustion from rising crude prices has set in. If the dollar continues to rally, oil prices could continue to fall.”

St. Louis Federal Reserve Chairman James Bullard had said he wanted a full percentage point hike in interest rates by July 1, following the release of data on the inflation in the United States, which experienced its largest annual increase in 40 years.

Investors also eyed indirect talks between the United States and Iran to revive a nuclear deal, which resumed this week after a 10-day hiatus. A deal could see the lifting of sanctions on Iranian oil and ease the global supply squeeze.

White House spokeswoman Jen Psaki said the talks had “reached an urgent point” and that “an agreement that addresses the fundamental concerns of all parties is within sight.”

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) said global oil demand could rise even more strongly this year. The group forecasts a gain of 4.15 million barrels per day (bpd) this year, as the global economy shows a strong recovery from the pandemic.

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