- Advertisement -spot_img
28.2 C
Lagos
HomeBusinessOil prices fall on strengthened dollar, US economic outlook

Oil prices fall on strengthened dollar, US economic outlook

- Advertisement -spot_img

Oil prices were down in Asian 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 78 cents, or 0.94 percent, to trade at $82.34 a barrel. West Texas Intermediate crude (WTI) futures dropped 95 cents, or 1.20 percent, to $78.21 as of 0615 GMT.

Both benchmarks, declining for a second day after a 2 percent 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 percent over the course of this week. A strengthening dollar 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.

READ ALSO: Nigeria’s earnings fall in March, distributes N714.63 bln among 3-tiers of govt

“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’ estimates 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 level since 2019, above 2.4 million barrels per day, despite Moscow’s pledge to cut output, trading and shipping sources said.

(First published by Reuters)

Join Our Mailing List!

* indicates required
- Advertisement -spot_img
- Advertisement -spot_img
Must Read
Related News
- Advertisement -spot_img