Oil prices wobble amid weak demand, sturdy dollar
By Colleen Howe and Muyu Xu
BEIJING (Reuters) -Oil seesawed between modest falls and gains on Wednesday as traders weighed the impact on prices stemming from escalating geopolitical tensions, concerns over tepid demand and a stronger dollar.
The front-month March contract for Brent crude rose 4 cents to $79.59 a barrel at 0712 GMT. U.S. West Texas Intermediate crude also ticked up 4 cents to $74.41 a barrel.
U.S. crude stocks fell by 6.67 million barrels in the week ended Jan. 19, according to market sources citing American Petroleum Institute figures on Tuesday. Gasoline inventories, however, increased by 7.2 million barrels, stoking concerns over fuel demand in the world's top oil consumer.
The Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, will release the data later on Wednesday.
A stronger U.S. dollar also weighed on oil prices as demand from buyers in other currencies ebbs as they have to pay more for dollar-denominated oil.
The dollar index hovered near a six-week high against major peers on Wednesday as investors cemented expectations that the Federal Reserve would be in no rush to cut interest rates in the face of a resilient U.S. economy.
«Without current geopolitical tensions, we believe crude would sell off meaningfully. Over time, we expect supply risk premiums to decouple from conflict risk, analogous to Russia-Ukraine,» said Vikas Dwivedi, global energy strategist at Macquarie, in a note.
«Barring escalation in the Middle East, we expect crude price to stay in the current range for 1Q24. We do not anticipate supply loss,» said Dwivedi.
A coalition of 24 nations led by the U.S. and UK conducted new strikes against Houthi fighters in Yemen on Tuesday. The
Read more on investing.com
