Oil eases as strong dollar weighs on commodities markets
Brent crude futures slipped 3 cents to US$85.21 a barrel by 0632 GMT, after settling down 0.6% on Friday. U.S. West Texas Intermediate crude futures were at US$80.71 a barrel, down 2 cents
Oil prices inched down on Monday as concerns of higher-for-longer interest rates resurfaced and lifted the dollar, offsetting support for oil markets from geopolitical tensions and OPEC+ supply cuts.
Brent crude futures slipped 3 cents to US$85.21 a barrel by 0632 GMT, after settling down 0.6% on Friday. U.S. West Texas Intermediate crude futures were at US$80.71 a barrel, down 2 cents.
“The U.S. dollar has opened bid this morning and appears to have broken higher following better U.S. PMI data on Friday night and political concerns ahead of the French election,” said Tony Sycamore, a Sydney-based markets analyst at IG.
A stronger greenback makes dollar-denominated commodities less attractive for holders of other currencies.
The dollar index, which measures the greenback against six major currencies, climbed on Friday and was up slightly on Monday after purchasing managers index data showed U.S. business activity was at a 26-month high in June.
However, both benchmark crude contracts gained about 3% last week on signs of stronger oil products demand in the U.S., world’s largest consumer, and as OPEC+ cuts kept supply in check.
U.S. crude inventories fell while gasoline demand rose for the seventh straight week and jet fuel consumption has returned to 2019 levels, ANZ analysts said in a note.
ING analysts led by Warren Patterson said speculators have also become more constructive towards oil into summer and increased their net-long positions in ICE Brent.
“We remain supportive towards the oil market with a deficit over the third quarter set to tighten the oil balance,” the analysts said in a note.
Geopolitical risks in the Middle East from the Gaza crisis and a ramp-up in Ukrainian drone attacks on Russian refineries are also underpinning oil prices.
In Ecuador, state oil company Petroecuador has declared force majeure over deliveries of Napo heavy crude for exports following the shutdown of a key pipeline and oil wells due to heavy rains, sources said on Friday.
In the U.S., the number of operating oil rigs fell three to 485 last week, their lowest since January 2022, Baker Hughes, said in its report on Friday.
Affiliates: Azay FM 89.1 (Takoradi), Bawku FM 101.5, Bead FM 99.9 (Bimbilla), Mining City Radio 89.5 (Tarkwa), Nyatefe Radio 94.5 (Dzodze), Somuaa FM 89.9 (Gushegu), Stone City 90.7 (Ho) and Wale FM 106.9 (Walewale).
Listen online: asaaseradio.com, Sound Garden and TuneIn.
Follow us:
X: @asaaseradio995, @Asaase985ksi, @Asaase997tamale, @asaase1003, asaasepa1073
Instagram: asaaseradio99.5, asaase985ksi, asaase100.3, asaase99.7tamale, asaasepa107.3
LinkedIn: company/asaaseradio995. TikTok: @asaaseradio99.5
Facebook: asaase99.5, asaase985ksi, Asaase100.3, asaase99.7, AsaasePa107.3.
YouTube: AsaaseXtra.
Join the conversation. Accra: call 020 000 9951/054 888 8995, WhatsApp 020 000 0995. Kumasi: call 059 415 7985 or call/WhatsApp 020 631 5260. Tamale: call/WhatsApp/SMS 053 554 6468. Cape Coast: call/WhatsApp 059 388 2652.
#AsaaseRadio
#AsaasePa
#TheVoiceofOurLand
