Oil extends losses after tumbling below $100 on demand concerns

Oil extended losses below $100 a barrel as escalating fears about an economic slowdown rippled through global markets.

West Texas Intermediate futures fell for a third session to its lowest level in three months, after plunging 8 per cent on Tuesday. US inflation data for June is due Wednesday and economists project it surged to a fresh pandemic peak that will keep the Federal Reserve geared for another big interest-rate hike.

Oil has given up the bulk of its gains seen in the wake of the Ukrainian crisis, which drove prices above $130 a barrel in March. A stronger dollar and China’s rising Covid cases have added to the pressure. The International Energy Agency will provide its snapshot of the market later Wednesday.

Concerns over an economic slowdown have overshadowed tight physical crude markets. OPEC’s first outlook for 2023 suggests that there will be no relief for squeezed consumers, with more oil needed from the group even though most members are already pumping flat out.

US President Joe Biden has repeatedly called on OPEC to pump more and is scheduled to visit Saudi Arabia this week during a tour of the Middle East. The kingdom along with the UAE are the only group members with significant volumes of unused production capacity.

The American Petroleum Institute reported that US crude stockpiles rose by 4.76 million barrels last week, according to people familiar with the figures. The Energy Information Administration will report data on Wednesday.