Crude oil prices fell by more than 2%, at the end of trading today, Thursday, April 20 (2023), to continue losses for the second day in a row, recording their lowest levels in 3 weeks.
This comes amid expectations of an interest rate hike after recent economic data from the US and China failed to encourage expectations of an improvement in oil demand.
Crude oil prices today
At the end of the session, benchmark Brent crude futures – for June 2023 delivery – fell by 2.4%, to record $81.10 a barrel.
West Texas Intermediate crude futures – delivery in May 2023 – fell by 2.4%, recording $ 77.29 a barrel, which is the lowest close for this contract since March 31, according to what was seen by the specialized energy platform.
And crude oil prices ended their trading, yesterday, Wednesday, April 19, with a decline of more than 2%, amid fears of an economic recession that might limit demand.
Oil market analysis
“WTI is back below the $80 level and could continue to slide if the dollar continues its strong rally,” said Edward Moya, senior market analyst at OANDA.
The US dollar index rose this week, and a stronger dollar usually makes oil more expensive for holders of other currencies.
“The strong dollar has affected oil markets this week as the prospects for continued interest rate hikes have strengthened as bond yields rise again,” said CMC Markets analyst Tina Ting, according to Reuters.
“Although China reported better-than-expected GDP data, both industrial production and fixed-asset investment fell short of the agreed data level, which did not help boost crude oil prices,” she added.
US economic activity has not 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.
US oil stocks
“These unstable markets amplify recent concerns that monetary tightening has dampened demand for oil… while the market ignored the US Oil Inventories report,” ANZ Research said, in a note to clients.
US oil inventories fell by 4.6 million barrels last week, as refinery runs increased and exports increased, while gasoline stocks jumped unexpectedly due to disappointing demand, according to the US Energy Information Administration.
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.
in terms of supplies; Oil loadings from Russia’s western ports in April are likely to rise to the highest level since 2019, above 2.4 million barrels per day, despite Moscow’s pledge to cut output, according to trading and shipping sources.
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