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In early Asian trading on Wednesday, oil prices experienced a decline, influenced by a strengthening dollar, which dampened investor sentiment, particularly following recent rallies that propelled both benchmark crude oils to multi-month highs over the past two sessions.
Price Movements
Brent crude futures for May delivery dipped by 19 cents, representing a 0.2 percent decrease, to $87.19 a barrel by 0104 GMT. Similarly, US West Texas Intermediate crude futures for April delivery, set to expire at settlement on Wednesday, fell by 35 cents, or 0.4 percent, to $83.12 per barrel.
The dollar extended its gains for the fifth consecutive session, buoyed by data signaling the resilience of the US economy. This development weighed on the morale of Asian buyers, as a stronger dollar renders oil more expensive for holders of other currencies, consequently softening demand.
In the preceding session, both crude oil benchmarks reached their highest levels since late October. Traders scrutinized the impact of recent Ukrainian attacks on Russian refineries on global oil supplies. Reports from trade sources indicated a decline in Russian refining capacity following the strikes, leading to an uptick in crude exports from the country.
According to sources, oil exports from Russia’s western ports are projected to increase by approximately 260,000 barrels per day in March, surpassing the initial monthly plan. Meanwhile, insights from the American Petroleum Institute suggested a decrease in US stocks of crude oil and gasoline, with distillate stocks witnessing a rise. Market analysts, however, anticipated a slight increase in stocks, contrary to API figures.
Upcoming Data Release
Official data from the US Energy Information Administration is slated for release later on Wednesday, further shaping market sentiment and providing clarity on supply dynamics amidst ongoing geopolitical tensions and economic considerations.
