Home/Commodities/FX/Newsfeed

Oil Falls as Fundamentals Override Conflict

Share Print 0

Oil prices fell on Tuesday on concerns about the pace of economic growth in China and a stronger U.S. dollar, handing back some of the gains triggered by an escalation of tensions in the Middle East.

Global benchmark Brent crude prices were down 17 cents at $37.05 a barrel at 1314 GMT. U.S. West Texas Intermediate (WTI) crude slipped 7 cents to $36.69 a barrel.

“It is the Chinese stock market sell-off and the strong dollar that are pressuring oil,” said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.

Chinese stock markets fell again on Tuesday after a 7 percent dive on Monday, rattling markets worldwide and prompting action from the central bank and stock market regulator.

Concerns about the economy in China, the world’s second-largest oil consumer, were worsened by news that national rail freight volumes logged their biggest ever annual decline in 2015.

“Last year we talked about supply and demand even surprised on the upside. But with this news flow from China, demand fears have come back,” said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.

The U.S. dollar hit a one-month high against a basket of other currencies, weighing on oil prices as it made holding dollar-denominated commodities more expensive.

The oil market largely shrugged off rising political tensions in the Middle East. On Tuesday, Kuwait recalled its ambassador to Iran following attacks on Saudi missions by Iranian protesters, state news agency KUNA reported.

via 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.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza

@alfonso_forex

,
Back to Top