Singapore, April 20 (BNA): Oil prices fell in Asian trading today, Thursday, with the rise of the US dollar amid expectations of raising interest rates, and after recent economic data from the United States and China did not do enough to encourage expectations of an improvement in demand.
Brent crude futures lost 78 cents, or 0.94%, to trade at $82.34 a barrel. West Texas Intermediate crude futures were down 95 cents, or 1.20%, at $78.21 by 0615 GMT.
Both benchmarks, which are falling for a second day after dropping 2% on Wednesday, are at their lowest levels since OPEC+ announced a surprise production cut on April 2, as reported by Reuters.
“WTI is back below $80 and could continue to decline if strong dollar trade resumes,” Edward Moya, chief market analyst at OANDA, said in a note to clients.
The US Dollar Index is up around 0.40% this week. A stronger dollar makes oil more expensive for holders of other currencies.
“A strong dollar has weighed on oil markets this week as the prospects for continued interest rate hikes have strengthened as bond yields rise again,” Tina Ting, an analyst at CMC Markets in Auckland, said in an email.
She added, “Although China reported GDP data, both industrial production and fixed asset investment did not live up to the agreed data, which did not help boost oil prices.”
US economic activity hasn’t changed much in recent weeks, with employment growth moderating somewhat and price increases appearing to be slowing, according to a Federal Reserve report published on Wednesday.
“These unsettled markets, amplify recent concerns that monetary tightening has weakened demand for oil, while the market ignored the relatively bullish EIA Inventories report,” ANZ Research said in a note to clients.
US crude inventories fell by 4.6 million barrels last week as refinery runs ramped up and exports increased, while gasoline stocks unexpectedly jumped on disappointing demand, according to the US Energy Information Administration (EIA).
The decline in crude oil inventories was sharper than analysts’ estimates of 1.1 million barrels, and the American Petroleum Institute’s estimate late Tuesday of 2.7 million barrels.
WWA