Investing.com — Oil prices fell lower for a fourth day in a row on Thursday, pressured by a rising dollar amid worries about high U.S. interest rates and worries about crude oil demand amid an unexpected surge in the American supplies.
At 2:30 PM ET (19:30 GMT), the price was down 0.7% at $81.36 per barrel, while the stock was down 0.9% at $76.87 per barrel.
The dollar rises as US interest rate swings increase following strong data
Yields rose to put pressure on oil prices after data showed continued economic strength fueled rising inflation.
The S&P Global Flash US PMI Composite Output Index rose sharply from 51.3 in April to 54.4 in May, with the report also highlighting that “the pace of inflation is accelerating, recording the second-largest monthly increase over the past eight months.”
Initial jobless claims fell more than expected, underscoring the strength in the labor market and further dampening hopes for faster rate cuts.
American inventories are unexpectedly building up
Fears of sluggish demand and well-supplied markets were fueled on Wednesday by official data showing the US saw an unexpected rise in the week to May 17.
also grew, but had a smaller than expected draw.
The lecture set a stern tone ahead of the Memorial Day holiday weekend, which typically marks the start of the summer travel season that is expected to boost demand.
OPEC+ meeting in the spotlight
On the supply front, markets were awaiting a meeting of the Organization of the Petroleum Exporting Countries and Allies (OPEC+) in early June, where the cartel could potentially extend its current series of production cuts.
“The weakness in oil prices increases the likelihood that OPEC+ members will fully extend their additional voluntary supply cuts into the second half of the year,” ING said in a note.
OPEC+ oil producers are implementing voluntary production cuts totaling around 2.2 million barrels per day for the first half of 2024, with Saudi Arabia reversing an earlier voluntary cut.
These cuts come on top of previous cuts announced in several steps since late 2022 and bring the total committed cuts to around 5.86 million barrels per day, equivalent to just under 6% of daily global demand.
(Peter Nurse, Ambar Warrick contributed to this article.)
