Oil prices falling due to strengthening of dollar
2023.02.21 01:40
Oil prices falling due to strengthening of dollar
By Ray Johnson
Budrigannews.com – As markets hunkered down ahead of several more cues on U.S. monetary policy this week, oil prices fell on Tuesday, pulling back sharply from a recent recovery. Additionally, strength in the dollar weighed on the market.
This week’s primary focus is on the Federal Reserve’s February meeting, which is scheduled for Wednesday, as well as a number of Fed speakers. The minutes are likely to largely reiterate the hawkish outlook of the central bank.
The month of January demonstrated that price pressures remained persistent, so Fed officials recently issued a warning that are likely to rise more than anticipated this year.
Higher rates are supposed to weigh vigorously on monetary development, and thusly, hurt unrefined interest this year. This week’s reading of the, the Fed’s preferred inflation gauge, is also expected to show little evidence of inflation slowing in January.
By 22:04 ET (03:04 GMT), futures were down 0.9% to $83.33 a barrel and 0.8% to $76.80 a barrel. Tuesday’s losses largely offset a recovery in oil markets during the previous session.
Oil prices were also put under pressure by the, which was close to a six-week high against a basket of currencies. For international buyers, a strong dollar makes crude more expensive, which reduces demand.
After China relaxed most anti-COVID measures, optimism about a recovery in Chinese demand this year was largely offset by Fed fears. China is conjecture to drive rough interest to record highs this year, as indicated by the OPEC and the IEA.
However, recent economic data indicate that the COVID-19 pandemic is still affecting a number of different parts of the country. Local travel demand was up after anti-COVID measures were lifted, but it was now cooling from its peak in late January, according to Bloomberg data.
Oil markets were also impacted by a potential oversupply in the United States, particularly given that the Biden administration recently announced plans to sell 26 million barrels of crude from the Strategic Petroleum Reserve.
The possibility of oversupply in the world’s largest oil consumer was raised by the sale and the buildup that lasted seven weeks.
