Oil Prices Fall Sharply on Dollar

Oil prices fell by up to 3 percent for a second straight day on Wednesday as a resurgent dollar weighed on the market amid concerns that U.S. crude supplies may have started rising again after three weeks of draws.  Industry group American Petroleum Institute (API) said after the market’s settlement that U.S. crude inventories rose by 1.3 million barrels last week.

A Reuters poll of nine analysts estimated a crude stock drawdown of 900,000 barrels on average, which would mark a fourth consecutive week in inventory declines. Data from the U.S. Energy Information Administration (EIA) on Friday will show how accurate those estimates are.  Gasoline RBc1 and heating oil HOc1 prices fell more than 2 percent, extending the slide across the fuels complex, on bets that U.S. refineries will be operating at full swing with the end of maintenance season.

The dollar soared against major currencies on speculation about the first U.S. interest rate hike in years. A stronger greenback makes dollar-denominated commodities, including oil, less affordable in other currencies.  Other factors held little sway, including France’s warning to Iran that it was ready to block a final deal on Tehran’s nuclear program unless Iran provided full access to inspectors. Iran needs the nuclear deal to unlock sanctions on its crude exports.

Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.