Oil prices decline driven by strong US dollar index
Date
5/14/2024 9:58:23 AM
(MENAFN) Oil rates experienced a decline on Tuesday, influenced by the strength of the US dollar index and in anticipation of significant US inflation data and upcoming speeches from Federal Reserve officials. At 11:19 a.m. local time (0819 GMT), the international benchmark brent crude was trading at USD83.16 per barrel, marking a 0.24 percent decrease from its previous closing price of USD83.36 per barrel. Similarly, the American benchmark, West Texas Intermediate (WTI), saw its price fall to USD78.92 per barrel at the same time, reflecting a 0.25 percent decline from the previous session's close at USD79.12 per barrel.
Investors and market participants are closely monitoring the forthcoming US inflation data, which holds significant implications for the global oil market, considering that the US is the world's largest oil consumer. The latest survey released by the Federal Reserve Bank of New York on Monday indicated an increase in short-term inflation expectations among US consumers. Specifically, the median one-year inflation expectation rose to 3.3 percent in April, up from 3 percent in March, suggesting that consumers are bracing for higher prices in the near term.
Analysts are forecasting that these rising inflation expectations, combined with the cautious approach of US Federal Reserve officials, could dampen risk appetite in global markets. This sentiment is echoed by Fed Vice Chairman Philip Jefferson, who emphasized that interest rates should remain at their current "restrictive" levels until there is clear and sustained progress in reducing inflation. The statements from Fed officials have diminished hopes for imminent interest rate cuts in the US, thereby heightening concerns about a potential slowdown in economic growth and a consequent decrease in energy consumption.
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