oil refinery (archive)
Tuesday 25 April 2023 / 20:51
Oil prices fell on Tuesday, after achieving two sessions of gains, as uncertainty over the global economic outlook and a rising dollar conflicted with investor optimism about rising demand in China and expectations of lower US crude inventories.
The dollar rose as concerns about corporate earnings and the global economic outlook increased. The rise of the dollar makes oil more expensive for buyers holding other currencies, and may reflect a decline in investors’ appetite for risk.
“The recovery of the dollar has an impact on sentiment,” said Stephen Brennock of oil brokerage PVM. “I think the upcoming macro releases of US house prices and consumer confidence keep buyers worried as well.”
Brent crude futures fell by $1, or 1.2%, to $81.73 a barrel, and US West Texas Intermediate crude fell 77 cents to $77.99 a barrel. Both crude futures rose more than 1% on Monday. “The general level of risk appetite has softened increasingly again today, given the losses seen in most commodity markets,” said Ole Hansen, commodities strategist at Saxo Bank.
Oil prices rose earlier in the day, supported by investor optimism that holiday travel in China will boost demand for fuel, and expectations of a decline in US crude inventories. Voluntary and involuntary supply cuts also helped support oil’s rally. And there were some tangible signs of an imminent resumption of oil exports in northern Iraq after stopping for a month. Members of the OPEC + oil-producing group are scheduled to start voluntary cuts in May.
However, investors remain concerned about the possibility that central banks in the United States, Britain and the European Union will raise interest rates to curb inflation, which could slow economic growth and hurt energy demand. The Federal Reserve (the US central bank), the Bank of England (the central bank) and the European Central Bank are expected to raise interest rates at their monetary policy committee meetings during the first week of May.
Today, investors are looking forward to the oil industry’s data on US inventories. Analysts expected the data to show a decline in US crude inventories by about 1.7 million barrels in the week ending April 21. The US government’s data on crude inventories is scheduled to be released on Wednesday.
2023-04-25 16:51:00
#Oil #falling #light #uncertainty #surrounding #economic #outlook
