Crude oil prices turned lower today, Tuesday, April 11 (2023), to continue recording losses for the second consecutive session, amid fears of declining demand.
This comes after Chinese inflation data indicated continued weak demand, but the decline in the dollar and expectations that the Federal Reserve will stop tightening its policy limited oil’s losses.
Crude oil prices had started their morning dealings on the rise, with fears of a shortage of supplies, the return of demand for oil in Asian countries, and the decline in US crude stocks.
Crude oil prices today
By 11:26 AM GMT (02:26 PM Mecca time), Brent crude futures contracts – for June 2023 delivery – fell by 0.18%, recording $ 84.03 a barrel.
West Texas Intermediate crude futures – for May 2023 delivery – fell by 0.11%, to record $ 79.65 a barrel, according to what was seen by the specialized energy platform.
And crude oil prices ended their trading, yesterday, Monday, April 10, down by about 1%, with the rise of the dollar and fears of increasing interest rates in the United States, following the monthly jobs report.
Oil market analysis
Data from China showed that consumer inflation in March reached its slowest pace since September 2021, indicating continued weak demand amid an uneven economic recovery, prompting expectations that Beijing may take steps to boost growth.
“China’s consumer price index for March is lower than expected, which may boost the Chinese government to stimulate the economy further,” said CMC Markets analyst Tina Ting.
Crude oil prices got a boost as the dollar weakened on expectations that the Federal Reserve is nearing the end of its rate hike cycle.
“With more central banks pausing interest rate hikes, such as the Reserve Bank of Australia and the Bank of Korea, the Fed’s expectations of less tightening have been strengthened,” Teng said.
Prices were also supported by signs of strong fuel demand in India, the world’s third largest oil consumer, in March.
Last month, fuel consumption jumped 5% from a year earlier to a record 4.83 million barrels per day.
oil supplies
“The short-term crude oil demand outlook will become clearer this week,” said Edward Moya, senior analyst at OANDA.
He added, “Wall Street should have a strong control over the course of the economy after it gets the pivotal inflation report,” according to Reuters.
Oil futures have risen more than 5% since the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, announced last week a new round of production cuts, starting next May.
OPEC + raised the total size of the alliance’s cuts to 3.66 million barrels per day, including a cut of two million barrels in October, equivalent to about 3.7% of global demand.
On the US supply side, the American Petroleum Institute data on US oil inventories is scheduled to be released later today, Tuesday.
An average of 5 analysts polled by Reuters estimated that crude inventories fell by 1.3 million barrels in the week ending April 7.
The US inflation report, which will be released on Wednesday, may help investors gauge the path of interest rates in the near term.
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