By Zhang Mengying

Investing.com – Oil was down on Monday morning in Asia on concerns that an expected interest rate hike from the U.S. Federal Reserve could dent fuel demand.

Brent oil futures fell 0.81% to $97.58 by 12:03 AM ET (4:04 AM GMT) and crude oil WTI futures dived 0.79% to $93.95.

“The market tone is likely to remain bearish amid worries that interest rate hikes would slash global fuel demand and that the resumption of some Libyan crude oil output would ease tightness in global supply,” said Fujitomi Securities Co Ltd chief analyst Kazuhiko Saito.

Investors are assessing the possibility of further interest rate hikes, which could limit economic growth, against tight supply as the West posed sanctions on Russian oil.

U.S. Federal Reserve officials have indicated that the central bank would likely raise interest rates by 75 basis points at its July 26-27 meeting.

On the supply side, Libya’s National Oil Corporation (NOC) aims to bring back production to 1.2 million barrels per day (bpd) in two weeks, NOC said in a statement early on Saturday.

The European Union said last week that it would allow Russian state-owned companies to ship oil to third countries under an adjustment of sanctions to limit the risks to global energy security.

However, Russian Central Bank Governor Elvira Nabiullina said on Friday that Russia will not supply oil to countries that impose a price cap on its oil.

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