Oil closes lower amid concerns over monetary tightening

Oil drilling rigs

Oil prices fell at the end of trading today, May 13, affected by concerns that the Federal Reserve will raise interest rates as inflationary pressures worsen, while attention turned to Beijing ahead of a high-level summit between the US and Chinese presidents.

Brent crude futures for July delivery fell 1.99%, or $2.14, to $105.63 a barrel. WTI crude oil futures for June delivery also fell by 1.14% or $1.16 to $101.02 a barrel, after rising to $103.67 during trading.

Boston Federal Reserve President Susan Collins warned that the US central bank may have to raise interest rates to contain inflationary pressures stemming from the war in the Middle East.

Collins' warning came after data showed annual producer price inflation accelerated in April to its highest level in four years, driven by rising prices for goods and services, in the latest indication of the depth of the fallout from the war with Iran.

Oil losses were limited by a decline in US crude inventories for the third consecutive week, at a time when the International Energy Agency warned of a global oil supply deficit this year as a result of supply disruptions from the Middle East.