is seen trading near a two-week low as the U.S. dollar resumes its rise while oil inventories are seen rising in the United States amid a bleak outlook for global demand growth.
The dollar index rose to the highest in almost 10 months at 83.98 and the euro touched the lowest in almost six weeks as improving sentiment toward the U.S. economy triggered bets the Fed will reduce stimulus.
The U.S. dollar also found support from the rising demand on safe haven after Germany, Europe’s largest economy, grew slower than estimated while France fell into its third recession in four years.
Oil tends to move inversely against the dollar as it reduces the appeal of the dollar dominated commodities
Further weighing on oil prices is the report released by the American Petroleum Institute (API) which showed that crude inventories rose 1.1 million barrels in the week ended on May 10, far higher than forecast.
- Crude oil is trading around the $93.75 a barrel after falling from the highest $94.40 to the lowest $93.82
- Brent is trading around $102.36 a barrel as of this writing after falling 0.23% or $0.24
Meanwhile, the rising output from OPEC and the investigations conducted by the European antitrust regulators on the region’s oil companies amid suspicion of price manipulation dampened sentiment.
Later today focus will turn to the report released by the Energy Information Administration (EIA) that may show crude inventories probably increased for the fourth week, rising 200,000 barrels to 396 million.
Crude’s losses seem to be somehow limited as prices find some support from the equity markets, yet as today’s EIA data may show demand is weak in the U.S., the downside risks for oil will persist.
- Natural gas is trading at $4.023 per cubic feet after falling 0.02%
- Gasoline is trading at $2.8291 a gallon after falling 0.30%
- Heating oil is trading at $2.8614 a gallon after falling 0.40%