Oil prices give up 2%, dollar slips amid Chinese developments

Oil futures tilted lower 2% in Asian trade with US crude off March 28 highs, while Brent slipped from May 9 highs, even as the dollar index gave up ground as well.

As of 06:29 GMT, US crude futures due in June fell 1.76% to $109.06 a barrel, while Brent July futures tumbled 2.55% to $109.77 a barrel, as the dollar index slipped 0.02% to 104.57. 

China's retail sales fell 11.% in April, while industrial production tumbled 2.9% m/m, with the unemployment rate up to 6.1% from 5.8%

The Chinese government admitted that under pressure from the latest Covid 19 wave, economic performance has suffered in the short term. 

Latest World Health Organization ddata showed Covid 19 infections are up to 517.65 million, with the death toll at 6.261 million.

From the US, the Empire State Manufacturing index is expected down to 15.3 from 24.6.

Goldman Sachs analysts have cut estimates for US GDP growth this year to 2.4%, and next year to 1.6% due to the ongoing inflationary pressures. 

Analysts are also taking into account the rapid pace of rate hikes by the Federal Reserve, expected throughout the year. 

Fed Chair Jerome Powell said last week that cutting down inflation to the targets of 2% will case some pain to the economy, but it's a necessary step, to keep hiking rates throughout the next two years to stabilize the economy. 

Baker Hughes data last week showed US oil rigs rose by 6 rigs to 563 rigs, the highest since March 2020, and it's the eighth weekly increase in a row.

US output fell for the first time since late January, by 100 thousand bpd to 11.8 million bpd away from May 2020 highs, while still down 1.3 million bpd, or 11% from a record high at 13.1 million bpd, reached in March 2020.