Oil slips as investors weigh demand outlook ahead of Federal Reserve meet

Oil dipped ahead of a Federal Reserve meeting this week that’s expected to result in another large interest-rate hike to combat surging inflation, escalating concerns of an economic slowdown.

West Texas Intermediate futures edged lower toward $96 a barrel after rising 2.1 per cent on Monday.

Morgan Stanley trimmed its oil price forecasts this year and into 2023 due to reduced demand projections following a slowdown, although the investment bank signaled that the crude market remains tight.

The oil market has been gripped by bouts of volatility recently, but crude is still almost 30 per cent higher this year after a rebound in economic activity coincided with upended trade flows from Russia.

The tight market may get some relief from recovering Libyan output, which has climbed above one million barrels a day.