West Texas Intermediate remained below $80 a barrel after experiencing a 1.2% drop on Monday due to a stronger US dollar and apprehensions over an economic downturn that could reduce energy demand. The dollar has strengthened over the past three sessions as investors bet on the Federal Reserve raising borrowing costs again in May, even though the intense rate-hike cycle might be reaching its end. Oil prices have rebounded since hitting a 15-month low last month amid a banking crisis that reverberated across global markets.
Despite bullish sentiments surrounding China’s economic recovery, Citigroup warned that the leading importer’s recuperation has been slower than anticipated and predicts prices to plummet below $80 per barrel. Traders can expect further market insights as OPEC and the International Energy Agency release their monthly outlooks this week, in addition to the release of US inflation data and Federal Reserve minutes.