Oil prices slipped on Monday as concerns about rising interest rates, the global economy and the outlook for fuel demand outweighed support from the prospect of tighter supplies on OPEC+ supply cuts. Brent crude slipped 48 cents, or 0.6 per cent, to $81.18 a barrel by 0045 GMT while U.S. West Texas Intermediate crude was at $77.39 a barrel, down 48 cents, also 0.6% lower.

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Both contracts fell more than 5 per cent last week, their first weekly drop in five, as U.S implied gasoline demand fell from a year ago, fuelling worries of a recession at the world’s top oil consumer.

Weak U.S. economic data and disappointing corporate earnings from the tech sector sparked growth concerns and risk aversion among investors, CMC Markets analyst Tina Teng said. The stabilising U.S. dollar and climbing bond yields are also pressurising commodity markets, she added.

Central banks from the United States to Britain and Europe are all expected to raise interest rates when they meet in the first week of May, seeking to tackle stubbornly high inflation.

China’s bumpy economic recovery post-COVID-19 also clouded its oil demand outlook, although Chinese customs data showed on Friday that the world’s top crude importer brought in record volumes in March. China’s imports from top suppliers Russia and Saudi Arabia topped 2 million barrels per day (bpd) each.

Still, refining margins in Asia have weakened on record production from top refiners China and India, curbing the region’s appetite for Middle East supplies loading in June.

Nevertheless, analysts and traders remained bullish about China’s fuel demand recovery towards the second half of 2023 and as additional supply cuts planned by OPEC+ - the Organization of the Petroleum Exporting Countries and allied producers including Russia - from May could tighten markets.

“China’s oil demand recovery is expected to more than offset the slowdown in OECD demand in the near term, while sanctions and supply constraints add upside risk to prices,” analysts at the National Australia Bank said, adding that Brent could rise to $92 a barrel by the end of the second quarter.

In the United States, energy firms last week added oil and natural gas rigs for the first time in four weeks, energy services firm Baker Hughes Co said.