Oil prices edged lower on stronger US dollar, rise in US commercial stocks
A stronger dollar typically renders dollar-denominated commodities like oil more expensive for holders of other currencies, dampening global demand and exerting downward pressure on prices.
International benchmarks for crude oil inched slightly lower on Wednesday, 06 November 2024 as the greenback rallied to its highest level since September 2022 following the US presidential election and an unexpected buildup in US inventories.
Brent crude decreased by $0.61 to close at $74.92/barrel.
WTI was down by $0.30 to settle at $71.69/barrel.
A stronger dollar typically renders dollar-denominated commodities like oil more expensive for holders of other currencies, dampening global demand and exerting downward pressure on prices.
The bearish sentiment was further reinforced by data from the Energy Information Administration (EIA), which reported a surprising buildup of 2.1 million barrels in U.S. commercial crude inventories for the week ending November 1. The increase was primarily driven by a spike in net imports.
Despite the bearish outlook, potential heightening tensions in the Middle East and OPEC+ policies offer some support to limit further declines in oil prices.
Written by: Muhammad Hafiz