Oil slips as dollar strengthens and demand concerns weigh
Shafaq News/ Oil prices fell in Asian morning trade on Thursday as the U.S. dollar strengthened on rate-hike expectations and after recent economic data from the U.S. and China did not do enough to encourage expectations that demand will improve.
Brent crude futures lost 80 cents or 0.96% to trade at $82.32 a barrel. West Texas Intermediate crude (WTI) futures dropped 69 cents or 0.87% to $78.47 as of 0302 GMT.
Both benchmarks, declining for a second day after a 2% fall on Wednesday, are at their lowest since OPEC+ announced its surprise production cut on April 2.
"WTI crude is back below the $80 level and it could continue drifting lower if the strong dollar trade resumes," Edward Moya, senior market analyst at OANDA, said in a client note.
The U.S. dollar index has moved up around 0.40% over the course of this week. A strengthening greenback makes oil more expensive for holders of other currencies.
"The strong USD weighed on oil markets this week as odds for the Fed to continue rate hikes strengthened as bond yields started climbing again," Tina Teng, an analyst at CMC Markets in Auckland, said in an email.
"Though China reported better-than-expected GDP data, both industrial production and fixed asset investments fell short of consensus data, which did not help (in) boosting oil prices," she added.
U.S. economic activity was little changed in recent weeks, with employment growth moderating somewhat and price increases appearing to slow, according to a Federal Reserve report published on Wednesday.
"This unsettled markets, magnifying recent concerns that monetary tightening has weakened demand for oil...[while] the market shrugged off a relatively bullish EIA inventory report," ANZ Research said in a client note.
U.S. crude stockpiles fell by 4.6 million barrels last week as refinery runs and exports rose, while gasoline inventories jumped unexpectedly on disappointing demand, according to the U.S. Energy Information Administration (EIA). , , ,
The crude stockpile decline was far steeper than analysts' estimate of 1.1 million barrels, and the American Petroleum Institute's estimates late on Tuesday of 2.7 million barrels.
On the supply side, oil loading from Russia's western ports in April is likely to rise to the highest since 2019, above 2.4 million barrels per day, despite Moscow's pledge to cut output, trading and shipping sources said.
(Reuters)
