Oil prices decrease on concerns about economic recession among the world’s biggest economies and resulting negative impact on fuel demand globally. 

A barrel of European reference oil Brent trades for USD 80.16 Monday morning against USD 83.33 Friday afternoon. US West Texas Intermediate (WTI) sells at the same time for USD 73.53 against USD 77.15.

In addition to traders fretting about of less fuel consumption, the market reacted to Friday’s strong US labor data, raising concerns that the Federal Reserve will keep raising interest rates, writes Reuters. 

The outlook to the Fed raising dollar interest strengthened the greenback, which resulted in oil prices increasing accordingly.

International Energy Agency (IEA) Executive Director Fatih Birol noted that China’s recovery will be a decisive factor in oil futures.

He expects half of global oil demand growth to come from the Chinese recovery, writes Reuters.

Depending on how strongly China will bounce back throughout 2023, he believes that the Organization of Petroleum Exporting Countries and OPEC+ allies, might have to reassess decision to cut output quotas.

According to several analysts, however, increasing interest rates might have the opposite effect.

”We are not seeing any big evidence of a China domestic demand rebound yet, though mobility numbers are encouraging,” says DBS Bank’s energy analyst Suvro Saka to Reuters.

Price ceiling on Russian crude came into force on Sunday among G7 countries, EU and Australia agreeing to a USD 100 cap per barrel on diesel and USD 45 per barrel on products traded at a discount, such as fuel oil.

”For the moment, the market expects non-EU countries will increase imports of refined Russian crude, thus creating little disruption to overall supplies,” Reuters cites an ANZ analyst of noting.