Oil plummets over 5%; Brent below $76

Oil drilling rigs

Oil closed at a five-week low today, May 2, as prices crashed amid renewed concerns about the US debt ceiling and expectations of monetary tightening.

Crude prices came under pressure as expectations grew on further interest rates hikes by the US Federal Reserve (on May 3) and the European Central Bank (on May 4).

Higher interest rates tend to slow economic growth, and reduce energy demand.

Meanwhile, US job openings fell for a third straight month in March and layoffs increased to the highest level in more than two years.

In China, data showed a decline in factory activity.

A Reuters survey showed that OPEC production decreased to 28.62 million barrels per day in April, down by 190,000 barrels compared to March levels.

Morgan Stanley lowered its forecast on Brent crude in Q3 2023 by about $12.50 to $77.50 a barrel, amid strong Russian supplies.

The American Petroleum Institute's report on oil inventories is expected to be issued later today, before the release of official stock data from the US Energy Information Administration on May 3, amid expectations of a decline in crude stocks by one million barrels.

Brent crude futures contracts for July delivery fell by 5%, or $3.99, to close at $75.32 a barrel.

WTI crude for June delivery decreased by 5.3%, or $4, to record $71.66 per barrel.