New York [US], June 28: Crude oil futures prices suffered substantial losses on Tuesday as hawkish comments from European Central Bank (ECB) President Christine Lagarde added concerns over oil demand outlook.
The West Texas Intermediate (WTI) for August delivery shed 1.67 U.S. dollars, or 2.41 percent, to settle at 67.70 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for August delivery lost 1.92 U.S. dollars, or 2.59 percent, to settle at 72.26 U.S. dollars a barrel on the London ICE Futures Exchange.
Oil markets are under pressure as traders focus on the hawkish comments from the ECB president, said Vladimir Zernov, analyst with market information supplier FX Empire.
"The ECB is ready to raise rates, which will put more pressure on the economy and may reduce demand for oil," added Zernov.
Inflation in the euro area is too high and is set to remain so for too long, said Lagarde at a central bank meeting in Portugal on Tuesday.
"We need to communicate clearly that we will stay 'at those levels for as long as necessary'. This will ensure that hiking rates does not elicit expectations of a too-rapid policy reversal and will allow the full impact of our past actions to materialize," Lagarde added.
Oil prices are standing down after it appears that the drama in Russia after the Wagner Group retreated from its march on Moscow has the market again focused on gloomy economic forecasts and global central bankers that still want a recession, said Phil Flynn, senior analyst at The PRICE Futures Group.
Better-than-expected U.S. economic indicators released on Tuesday failed to bolster oil prices as traders are set to draw clues from governmental weekly oil inventory data, which would be issued on Wednesday.
Source: Xinhua