TOKYO, April 20 (Reuters) – Oil prices fell in Asian trading on Thursday as the US dollar strengthened on rate hike expectations and after recent economic data from the US and China failed to do enough to buoy expectations that that demand will improve.
Brent crude futures lost 78 cents, or 0.94%, to trade at $82.34 a barrel. West Texas Intermediate Crude (WTI) futures were down 95 cents, or 1.20%, to $78.21 as of 0615 GMT.
Both benchmarks, which fell for a second day after a 2% drop on Wednesday, are at their lowest levels since OPEC+ announced its surprise production cut on April 2.
“WTI crude is back below $80 and could drift further lower if trading on the strong dollar resumes,” Edward Moya, senior market analyst at OANDA, said in a note to clients.
The US Dollar Index is up around 0.40% over the course of the week. A stronger greenback makes oil more expensive for holders of other currencies.
“The strong USD weighed on oil markets this week as the chances for the Fed to continue raising rates increased as bond yields started to rise again,” Tina Teng, an analyst at CMC Markets in Auckland, said in an email.
“Although China reported better-than-expected GDP data, both industrial production and fixed investment lagged consensus data, which did nothing to boost oil prices (in),” it added.
According to a Federal Reserve report released on Wednesday, US economic activity has been little changed in recent weeks, with job growth moderating somewhat and price increases appear to be slowing.
“This unsettled markets, adding to recent concerns that monetary tightening has weakened demand for oil…[while] the market shrugged off a relatively optimistic EIA inventory report,” ANZ Research said in a note to clients.
According to the US Energy Information Administration (EIA), US crude stocks fell by 4.6 million barrels last week as refinery runs and exports surged, while gasoline stocks unexpectedly surged on disappointing demand. , , ,
The fall in crude inventories was much steeper than analysts’ estimate of 1.1 million barrels and the American Petroleum Institute’s late Tuesday estimate of 2.7 million barrels.
On the supply side, oil shipments from Russia’s western ports are expected to rise in April to the highest level since 2019, over 2.4 million barrels a day, despite Moscow’s pledge to curb production, trade and shipping sources said.
Reporting by Katya Golubkova; Editing by Christopher Cushing
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