Oil edges down as inflation expected to impact fuel demand | Reuters

Oil edges down as inflation expected to impact fuel demand | Reuters

Oil prices dipped on Tuesday, paring some gains from the previous session, as the market feared that more aggressive interest rates hikes from central banks may lead to a global economic slowdown and soften fuel demand.

Brent crude futures for October settlement dropped 56 cents, or 0.5%, to $104.53 a barrel by 0620 GMT, after climbing 4.1% on Monday, the biggest increase in more than a month.

The October contract expires on Wednesday and the more active November contract was at $102.57, down 0.4%.

U.S. West Texas Intermediate crude was at $96.86 a barrel, down 14 cents, or 0.1%, following a 4.2% rise in the previous session.

Inflation is near double-digit territory in many of the world's biggest economies, a level not seen in close to a half century, which could prompt central banks in the United States and Europe to resort to more aggressive interest rate hikes. read more