WTI crude futures held below $78 per barrel on Monday after losing nearly 6% last week, weighed down by the prospect of further interest rate hikes that could hurt global economic growth and future energy demand. The US Federal Reserve will likely deliver another 25 basis point rate hike in May, while the market is split on whether the European Central Bank will raise rates by a quarter- or half-percentage point next month.
Investors now look ahead to US first-quarter GDP numbers this week to gauge the health of the world’s largest economy, after a key Fed report signaled that the US economy has stalled in recent weeks. The US oil benchmark has also given back most of the OPEC-driven rally, though traders remain cautious ahead of the group’s production cuts next month. Elsewhere, hopes for a rebound in Chinese demand continued to support the market, as the country’s first-quarter GDP numbers pointed to a stronger-than-expected growth.