Oil Futures Settle Notably Lower On Worries About Growth

Published: 5/1/2023 3:11 PM ET

Crude oil prices tumbled on Monday, weighed down by concerns about economic growth and worries about outlook for energy demand.

Data showing a contraction in Chinese manufacturing activity and a potential interest rate hike by the Federal Reserve weighed as well.

West Texas Intermediate Crude oil futures for June ended lower by $1.12 or about 1.5% at $75.66 a barrel.

Brent crude futures settled at $79.31 a barrel, down $1.02 or about 1.3% from the previous close.

The Federal Reserve, scheduled to announce its monetary policy on Wednesday, is widely expected to raise interest rate by 25 basis points.

The CME FedWatch tool, currently indicates that markets have priced in an 89.5% probability for a 25-basis points rate hike by the Fed in the forthcoming review. The same was 83.9% a day earlier and 90.5% a week earlier.

Data released by the National Bureau of Statistics over the weekend showed the Purchasing Managers’ Index (PMI) for China’s manufacturing sector came in at 49.2 in April, down from 51.9 in March.

A sub-index to measure new orders dipped to 48.8 from 53.6, indicating decline in market demand and acting as a major contributor to the fall