International Crude Oil Costs Fall Below Strain From Stronger US Greenback, Auto Information, ET Auto
SINGAPORE: Crude oil prices fell Thursday under pressure from a stronger US dollar, but losses were limited by a sharp decline in crude stocks in the United States, the world’s largest oil consumer.
Brent crude oil futures fell 74 cents, or 1%, to $ 73.65 a barrel by 0103 GMT, after hitting their highest since April 2019 in the previous session.
U.S. crude oil futures fell 69 cents, or 1%, to $ 71.46 a barrel after hitting their high since October 2018 the previous day.
“The energy markets were so fixated on a robust summer travel season and talks about a nuclear deal with Iran that they were somewhat taken by surprise by the Fed’s restrictive surprise,” said Edward Moya, senior market analyst at OANDA.
“The Fed was expected to put this session on hold, but it sent a clear message that it is ready to talk about tapering and that means the dollar is ripe for a rebound that is for everyone Commodities should be a headwind. ”
The US dollar posted its strongest daily gain in 15 months after the Federal Reserve signaled it could hike rates much faster than expected.
A firmer greenback makes the price of oil more expensive in dollars in other currencies, which can hurt demand.
Still, oil price losses were contained as data from the Energy Information Administration showed US crude inventories fell sharply last week as refineries ramped up to their highest level since January 2020, suggesting a continued improvement in demand .
Refining throughput in China, the world’s second largest oil consumer, also increased prices, rising 4.4% to a record high in May compared to the same month last year.
“This drop in oil prices should be temporary as fundamentals on both the supply and demand sides should be able to easily offset a rebounding dollar,” Moya said.