Oil below $90

Oil prices fell as macroeconomic concerns overshadowed the demand outlook, overshadowing the contraction in physical markets. U.S. crude traded around $88 a barrel after falling 2.2 percent in the previous session. The global slide in government bonds and stocks continued into Tuesday, while the dollar strengthened as investors seized on the Fed’s message that it should keep interest rates high for longer. U.S. crude has fallen about 6 percent since Wednesday’s close on fears about the global economy, halting a rally that saw it surge 29 percent last quarter on tight supply and had many analysts talking up $100 a barrel. Higher interest rates make crude more expensive to store and transport, and a stronger dollar means it’s more expensive for most buyers. “The downside in oil has very little to do with fundamentals; it has everything to do with rising Treasury yields and a stronger U.S. dollar. I still think there’s room for oil to go higher,” said Warren Patterson, head of commodity strategy at ING Groep NV. The Organization of the Petroleum Exporting Countries held production steady last month as the group and its allies continued to tighten supply. The OPEC+ alliance meets on Wednesday to review global markets but has shown no signs of slackening its grip. Tight supply has sent inventories plummeting in the major U.S. hub of Cushing, Oklahoma. Investors will look to the industry-funded American Petroleum Institute for forecasts for the past week late Tuesday, before official data is released on Wednesday.