Oil prices dipped on Tuesday, paring some gains from the previous session, as the market feared that more aggressive interest rates hikes from central banks may lead to a global economic slowdown and soften fuel demand.
Brent crude futures for October settlement dropped 56 cents, or 0.5%, to $104.53 a barrel by 0620 GMT, after climbing 4.1% on Monday, the biggest increase in more than a month.
The October contract expires on Wednesday and the more active November contract was at $102.57, down 0.4%.
U.S. West Texas Intermediate crude was at $96.86 a barrel, down 14 cents, or 0.1%, following a 4.2% rise in the previous session.
Inflation is near double-digit territory in many of the world’s biggest economies, a level not seen in close to a half century, which could prompt central banks in the United States and Europe to resort to more aggressive interest rate hikes.
“Risk appetite has cooled over an anticipation that the Federal Reserve would continue to increase interest rates … A pull-back of natural gas prices in Europe also adds uncertainties to the picture of energy crisis,” said analysts from Haitong Futures.