# Oil falls on demand worry as Fed ‘make or break moment’ approaches Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-02-13 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Oil prices soften as investors eye crucial US inflation data Meta Description: Discover why oil prices fell 1% as investors focus on short-term demand concerns due to upcoming U.S. inflation data and refinery maintenance in Asia and the URL: https://financedigest.com/oil-falls-on-demand-worry-as-fed-make-or-break-moment-approacheshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-02-13t020408z2lynxmpej1c01nrtroptp4global-oil-1736814455908-compressed.jpg) By Florence Tan and Emily Chow SINGAPORE (Reuters) -Oil prices eased around 1% on Monday after rising in the previous session, as investors focused on short-term demand concerns stemming from crucial upcoming U.S. [inflation data](https://www.financedigest.com/oil-jumps-on-lower-than-expected-us-inflation-data.html "Oil jumps on lower-than-expected US inflation data") and refinery maintenance in Asia and the United States. Brent crude futures fell 86 cents, or 1%, to $85.53 a barrel by 0715 GMT after a 2.2% gain on Friday. U.S. West Texas Intermediate crude was at $78.83 a barrel, down 89 cents, or 1.1%, after rising 2.1% in the previous session. Crude prices are softening as energy traders anticipate a potentially weakening crude demand outlook as a pivotal [inflation report could force the Fed to tighten policy](https://www.financedigest.com/boes-mann-falling-headline-inflation-high-core-make-policy-difficult.html "BoE’s Mann: Falling headline inflation, high core, make policy difficult") much more aggressively,” said Edward Moya, senior analyst at OANDA, referring to U.S. [consumer price](https://www.financedigest.com/analysis-to-raise-prices-or-not-consumer-goods-makers-weigh-bets-on-buyer-strength.html "Analysis-To raise prices or not? Consumer goods makers weigh bets on buyer strength") data due on Feb. 14. This week could deliver a make or break moment in how bad of a recession [Wall Street](https://www.financedigest.com/wall-street-drops-treasury-yields-gyrate-on-fed-chairman-powells-remarks.html "Wall Street drops, Treasury yields gyrate on Fed Chairman Powell’s remarks") prices in. The U.S. Federal Reserve has been raising interest rates to rein in inflation, leading to concerns that the move would slow economic activity and [demand for oil](https://www.financedigest.com/oil-gains-after-iea-sees-demand-rising-to-record-high.html "Oil gains after IEA sees demand rising to record high"). Additionally, the resumption of Azerbaijani [oil exports](https://www.financedigest.com/u-s-oil-exports-to-europe-hit-record-in-march-on-steep-discounts.html "U.S. oil exports to Europe hit record in March on steep discounts") on Sunday at Turkey’s Ceyhan terminal also relieved supply concerns, said analyst Tina Teng at CMC Markets. The terminal had been damaged in the devastating [earthquakes that hit Turkey](https://www.financedigest.com/eus-eib-to-override-turkey-lending-ban-with-earthquake-aid.html "EU’s EIB to override Turkey lending ban with earthquake aid") and Syria last week. It is the storage and loading point for [pipelines which carry oil](https://www.financedigest.com/keystone-oil-pipeline-restart-timetable-unclear-traders-worry-about-supply.html "Keystone oil pipeline restart timetable unclear; traders worry about supply") from Azerbaijan and Iraq. Oil prices gained on Friday after Russia, the [world’s third largest](https://www.financedigest.com/at-chinas-largest-trade-fair-exporters-worry-about-world-economy.html "At China’s largest trade fair, exporters worry about world economy") oil producer, said it would cut crude production in March by 500,000 barrels per day (bpd), or about 5% of output, in retaliation against western curbs on its exports that were imposed in response to the Ukraine conflict. On a weekly basis, both the Brent and WTI contracts rose more than 8% last week, buoyed by optimism over demand recovery in China, the [world’s top](https://www.financedigest.com/top-10-fastest-bikes-in-the-world.html "Top 10 fastest bikes in the world") crude importer and No. 2 oil consumer, after [COVID curbs](https://www.financedigest.com/were-going-to-be-free-chinese-cheer-as-covid-curbs-are-loosened.html "‘We’re going to be free’: Chinese cheer as COVID curbs are loosened") were scrapped in December. [China’s oil](https://www.financedigest.com/oil-rises-about-2-with-u-s-and-china-inflation-in-focus.html "Oil rises about 2% with U.S. and China inflation in focus") demand recovery is curbing its gasoline exports in February although its refiners are maintaining diesel shipments at above 2 million tonnes. Stefano Grasso, a senior portfolio manager at 8VantEdge in Singapore, said the 500,000 bpd cut would [bring Russia back](https://www.financedigest.com/trump-charges-bring-new-york-zombie-case-back-to-life.html "Trump charges bring New York ‘zombie case’ back to life") in line with its OPEC+ quota as Moscow is currently over-exporting. The Organization of the Petroleum Exporting Countries (OPEC) and their allies including Russia, a group known as OPEC+, in October agreed to [cut production by 2 million](https://www.financedigest.com/musk-says-tesla-price-cuts-triggered-demand-2023-sales-could-hit-2-million-vehicles.html "Musk says Tesla price cuts triggered demand, 2023 sales could hit 2 million vehicles") bpd, about 2% of world demand. Oil prices may resume their rally back to $100 a barrel later this year on China’s [demand recovery and limited supply growth due to a lack of investment](https://www.financedigest.com/investments-in-the-caribbean-increasing-due-to-cbi-demand.html "Investments in the Caribbean Increasing Due To CBI Demand"), OPEC country officials told Reuters. (Reporting by Florence Tan in Singapore and Emily Chow in Kuala Lumpur; Editing by Christian Schmollinger) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---