Oil prices fell nearly 3 percent on Monday amid persistent concerns around the demand outlook and ahead of a slew of key central bank meetings due this week.
Benchmark Brent crude futures tumbled 2.5 percent to $72.94 a barrel, while WTI crude futures were down 2.6 percent at $68.34.
Concerns about China’s fuel demand growth and rising Russian crude supply weighed on prices, with Goldman Sachs Group Inc. cutting its price forecast by nearly 10 percent.
Goldman Sachs lowered its Brent outlook for December to $86 a barrel from $95 a barrel, citing signs of increasing supply and slower demand for crude.
The investment bank also revised down its WTI forecast for December from $89 per barrel to $81 despite Saudi Arabia’s announcement of output cuts and efforts by OPEC Plus to limit supplies into 2024.
Meanwhile, investors await the outcome of a slew of central bank meetings this week that should determine the short-term outlook for the global economy.
Traders will pay close attention to the Federal Reserve’s monetary policy meeting scheduled from 13th June to 14th, with the U.S. central bank expected to pause its recent interest rate increases.
The Fed’s accompanying statement as well as key U.S. consumer inflation data will be key as investors look for clues about the outlook for rates.
Meanwhile, more Chinese banks cut deposit rates, signaling monetary easing ahead. There is a chance of China cutting its medium-term lending facility on Thursday.
Analysts expect the European Central Bank to hike rates by 25 bps on Thursday while the Bank of Japan is likely to maintain its current loose policy settings on Friday.
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