Oil futures slipped on Monday, retreating from multi-week highs due to weaker-than-expected consumer spending in China and investor caution ahead of the U.S. Federal Reserve’s interest rate decision. Brent crude fell 58 cents (0.8%) to settle at $73.91 a barrel, while U.S. West Texas Intermediate (WTI) dropped 58 cents (0.8%) to $70.71. Both benchmarks had closed at their highest levels since November on Friday.
The decline followed last week’s gains, driven by expectations of tighter supply from sanctions on Russia and Iran and optimism about potential interest rate cuts. However, concerns about China’s sluggish retail sales and fragile economy dampened sentiment, despite stimulus measures. Analysts noted traders were taking profits after last week’s 6% price surge, with many funds closing positions ahead of the holiday season.
Adding pressure, the U.S. dollar strengthened to a three-week high, while traders awaited U.S. oil inventory reports. Preliminary estimates suggest crude inventories fell by 1.9 million barrels last week, with gasoline stocks likely rising. Investors are also closely watching the Fed’s meeting, where a rate cut could boost economic growth and oil demand.