Oil Prices Fall Amid Rising Dollar
Oil prices continued to fall for a second straight session on Tuesday on a technical correction after last week’s rally, while expectations of ample supplies and a strong dollar also weighed
Brent crude futures were down 28 cents, or 0.37%, at $76.02 a barrel by 0148 GMT, while U.S. West Texas Intermediate (WTI) crude was down 33 cents, or 0.45%, at $73.23.
Both benchmarks rose for five straight days last week and settled at their highest levels since October on Friday, partly on expectations of more fiscal stimulus to revitalize China’s faltering economy.
“This week’s weakness is likely due to a technical correction, as traders react to weaker global economic data that tempered the optimism seen earlier,” said Priyanka Sachdeva, senior market analyst at Phillip Nova, referring to weak economic news from the U.S. and Germany.
“In addition, the dollar’s strength is catching up with market sentiment and appears to be paring the recent gains in oil prices,” Sachdeva said.
The U.S. dollar wobbled but remained close to a two-year peak it hit last week amid uncertainty over the size of tariffs from the incoming Trump administration.
A stronger dollar makes oil more expensive for holders of other currencies.
Rising demand from non-OPEC countries, coupled with weak demand from China, is expected to keep oil markets well supplied next year, and that has also capped price gains.
“The move higher in crude oil prices appears to be running out of momentum,” ING analysts wrote in a note.
“Despite some tightening in the physical market, fundamentals out to 2025 are still fairly sound, which should cap gains.”
Source: Investing.com
