Global oil prices steadied on Tuesday as the prospect of OPEC+ maintaining oil supply curbs at its June 2 meeting and hopes of strong U.S. summer fuel demand balanced concern about higher-for-longer U.S. interest rates.
The July contract for Brent, the global benchmark, rose 13 cents or 0.2 per cent to $83.23 a barrel by 1015 GMT. U.S. West Texas Intermediate crude was at $78.91, up $1.19 or 1.5 per cent, from Friday’s close, having traded through a U.S. holiday to mark Memorial Day without a settlement. Worries over U.S. interest rates remaining elevated for a longer period contributed to a weekly loss for crude last week. Higher rates boost the cost of borrowing, which can dampen economic activity and demand for oil.
Nonetheless, despite the general view that high interest rates could result in softer oil demand growth, “real-time mobility data indicates oil demand growth is still broadly healthy,” UBS analyst Giovanni Staunovo wrote in a client note.