Oil Prices Fall as High-Interest Rate Outlook Outweighs Tight Supply

Oil prices slipped in early trade on Tuesday amid concerns that fuel demand will be crimped by major central banks holding interest rates higher for longer, even with supply expected to be tight.

Brent crude futures were down 11 cents at $93.18 a barrel. US West Texas Intermediate crude futures were trading 1 cent lower at $89.67.

The world's top economic policy makers, the US Federal Reserve and the European Central Bank, have over the recent days reiterated their commitment to fight inflation, signaling tight policy may persist longer than previously anticipated. Higher interest rates slow economic growth, which curbs oil demand.

While supply remains tight as Russia and Saudi Arabia have extended production cuts to the end of the year, Moscow on Monday eased its temporary ban on gasoline and diesel exports, issued separately to stabilize the domestic market.

Oil is expected to trade above $90 per barrel during the week.

Oil prices have risen by around 30% since mid-year driven mostly by tighter supply, wiping off 0.5 percentage points from the global GDP growth in the second half of this year.

Source: Qatar News Agency