| 1 October 2023, Sunday |

Oil edges lower, pressured by strong dollar, China economic woes

On Monday, oil prices experienced minor declines but remained at their highest levels in 10 months. This was influenced by a robust U.S. dollar and ongoing worries about China’s economy, which put pressure on prices. However, the output cuts implemented by OPEC+ helped restrict more substantial drops in oil prices.
International benchmark crude Brent traded at $90.44 per barrel at 10.13 a.m. local time (0713 GMT), a 0.23% loss from the closing price of $90.65 a barrel in the previous trading session on Friday.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $87.02 per barrel, down 0.56% from the previous session’s close of $87.51 per barrel.

Both benchmarks climbed over 2% last week on supply risks triggered by output curbs announced by the world’s biggest producers, Russia and Saudi Arabia.

“Tightness in the physical market is also providing some support. US inventories fell 6,307 kbbl last week to hit their lowest level since December,” according to Daniel Hynes, a commodity strategist at Australia and New Zealand Banking Group.

However, Hynes said concerns about China’s poor economic growth weighed on sentiment across commodities.

On Thursday, the Chinese yuan sank to its lowest level against the US dollar in 16 years, echoing mounting skepticism about China’s economy and financial markets.

The rising trend of the US dollar since mid-July has been aiding dollar-indexed crude prices. However, markets remain wary ahead of US inflation data due on Wednesday, which could influence the US Federal Reserve’s (Fed) interest rate actions.

According to analysts, this week’s inflation figures will show the impact of supply interruptions in the energy industry. The Fed, meanwhile, is widely expected to keep the policy rate unchanged at its September meeting.

  • Anadolu Agency