Oil prices drop amid global inflation, lower demand

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 81 cents, or 0.7%, to $104.28 a barrel by 0359 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 $102.33, down 0.6%.

U.S. West Texas Intermediate crude was at $96.68 a barrel, down 33 cents, or 0.3%, 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.

Reuters/Hauwa Abu