Oil prices decline driven by stronger dollar, expectations of abundant global supply
(MENAFN) Oil prices declined for the second consecutive session on Tuesday, driven by a technical correction that followed last week’s significant rally. Market sentiment was further pressured by expectations of ample global supply and the continued strength of the U.S. dollar, both of which weighed on crude prices. These factors collectively overshadowed the bullish momentum seen in the prior week.
By 0148 GMT, brent crude futures had dropped by 28 cents, or 0.37 percent, to reach USD76.02 per barrel. Similarly, U.S. West Texas Intermediate (WTI) crude futures declined by 33 cents, or 0.45 percent, to settle at USD73.23 per barrel. The downturn in prices marked a contrast to last week’s robust performance, when both benchmarks recorded gains for five consecutive sessions and hit their highest levels since October during Friday’s close.
The rally seen last week was partly fueled by optimism surrounding potential fiscal stimulus measures aimed at boosting China’s slowing economy. Expectations of increased economic support from Beijing had raised hopes for improved oil demand, pushing prices higher. However, that optimism appears to have been tempered by weaker economic data and concerns about oversupply in the market.
Priyanka Sachdeva, senior market analyst at Philip Nova, attributed the current decline in oil prices to a technical correction following last week’s strong rally. She also noted that weaker global economic indicators are dampening the earlier positive sentiment. Additionally, the strengthening U.S. dollar is exerting downward pressure on oil prices, eroding some of the recent gains and contributing to the softer outlook this week.
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