I backed off Oil prices Monday, May 1, amid concerns about the economic impact of a possible interest rate hike by the Federal Reserve and weak Chinese manufacturing data, are enough to offset any support for oil prices from the new OPEC+ production cuts that took effect this month.
Brent crude futures for July delivery fell 56 cents, or 0.7%, to $79.77 a barrel, and US West Texas Intermediate crude fell 63 cents, or 0.8%, to $76.15.
US consumer spending stabilized in March, as the decline in spending on goods offset the increase in spending on services, but the persistence of strong underlying inflationary pressures could push the Federal Reserve to continue raising interest rates.
The Federal Reserve is expected to raise interest rates by 25 basis points again this week.
The US Federal Reserve raised the interest rate by 475 basis points in total since March of last year, from a level close to zero, to the current range of 4.75% to 5%.
The Reserve Bank of Australia is widely expected to keep interest rates unchanged next week, while the European Central Bank could unleash a surprise big half-point increase in interest rates in the same week.
Meanwhile, China's manufacturing purchasing managers' index fell to 49.2 from 51.9 in March, official data showed on Sunday, dipping below the 50-point mark that separates expansion from contraction in activity on a monthly basis.
As of today, Monday, oil production cuts of about 1.16 million barrels per day entered into force, based on a surprising decision taken last month by the OPEC + alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia.
