• The oil price is struggling to defend the immediate support of $77.00 as fears of a global slowdown have deepened.
• Global central banks are preparing for a fresh rate hike cycle to arrest stubborn inflation.
• Investors have ignored upbeat Chinese prospects and are worried due to global recession fears.

West Texas Intermediate (WTI), futures on NYMEX, have gauged an intermediate cushion around $77.00 in the Tokyo session. The oil prices have taken a sigh of relief after a four-day bearish spell maid uncertainty over further squeeze in monetary policy by global central banks.

The black gold has surrendered the majority of gains generated after OPEC+ announced surprise production cuts. And, a further decline in the oil price will expose it to the crucial support of $75.60. Deepening fears slowdown in the global economy knowing that central banks are preparing for a fresh rate hike cycle to arrest stubborn inflation will put a big dent in the overall oil demand.

Along with the Federal Reserve (Fed), the European Central Bank (ECB), and the Bank of England (BoE) are expected to hike rates further to bring down persistent inflation in their respective economies. The Fed and BoE are highly expected to raise rates further by 25 basis points (bps) while investors are divided about the pace of rate hikes by the ECB as options of 25 and 50 bps are available.

No one could deny the fact that a more conservative approach to monetary policies by global central banks would renew fears of global recession as manufacturing activities will be beaten down significantly.

Apart from that, investors have ignored upbeat Gross Domestic Product (GDP) numbers from China, which have strengthened signs of economic recovery and eventually the oil demand in the second-largest nation. It is worth noting that China is the largest importer of oil in the world and economic recovery in China would support oil prices.