Yahoo Finance Oil prices extend losing streak on dollar strength, demand concerns
Investing.com-- Oil prices settled lower for the fourth-straight day Thursday, pressured by a rising dollar amid concerns over high for longer U.S. interest rates as well as crude demand concerns amid unexpected build in U.S. inventories.
At 14:30 ET (19:30 GMT), Brent oil futures fell 0.7% to $81.36 a barrel, while West Texas Intermediate crude futures fell 0.9% to $76.87 a barrel.
Dollar rises as US rate jitters grow following strong data
The dollar climbed to put the squeeze on oil prices after data pointing to ongoing economic strength fueling a pick up inflation.
S&P Global Flash US PMI Composite Output Index rose sharply from 51.3 in April to 54.4 in May, with the report also highlighting that "the rate of inflation accelerating to register the second-largest monthly increase seen over the past eight months."
Initial jobless claims fell more than expected underscoring the strength in the labor market and further diminishing hopes for sooner rate cuts.
US inventories see unexpected build
Fears of sluggish demand and well-supplied markets were furthered by official data on Wednesday showing that U.S. oil inventories saw an unexpected build in the week to May 17.
Distillate inventories also grew, while gasoline inventories saw a smaller-than-expected draw.
The reading set a dour tone ahead of the Memorial Day holiday weekend, which usually marks the beginning of the travel-heavy summer season, which is expected to boost demand.
OPEC+ meeting in spotlight
On the supply front, markets were awaiting a meeting of the Organization of Petroleum Exporting Countries and allies (OPEC+) in early-June, where the cartel could potentially extend its current run of production cuts.
"The weakness in oil prices increases the likelihood that OPEC+ members fully roll over their additional voluntary supply cuts into the second half of the year," ING said, in a note.
OPEC+ oil producers are making voluntary output cuts totalling about 2.2 million barrels per day for the first half of 2024, led by Saudi Arabia rolling over an earlier voluntary cut.
These curbs come on top of earlier reductions announced in various steps since late 2022 and bring the total pledged cuts to about 5.86 million barrels per day, equal to just under 6% of daily world demand.
(Peter Nurse, Ambar Warrick contributed to this article.)
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