Oil hovers around $ 83 as strong dollar rivals inflation worries



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Crude oil storage tanks are seen from above at the Cushing Oil Hub in Cushing, Oklahoma on March 24, 2016. REUTERS / Nick Oxford

  • OPEC lowers oil demand forecast for end of 2021
  • Biden administration could order release of oil reserves
  • Brent seems to consolidate below $ 85 a barrel – analyst

Nov. 11 (Reuters) – Oil prices held steady just pennies lower on Thursday, as the market grappled with a stronger US dollar and concerns about rising inflation in the United States, and after OPEC cut its oil demand forecast for 2021 due to high prices.

Brent crude futures fell 8 cents to $ 82.56 a barrel at 1:42 p.m. EDT (1842 GMT) after falling earlier to $ 81.66. US West Texas Intermediate (WTI) futures fell 2 cents to $ 81.32 after hitting a session low of $ 80.20.

U.S. data on Wednesday showed that consumer price inflation rose in October at an annual rate of 6.2%, the fastest rate in 30 years, mainly due to rising prices for the energy. Expectations that the data would lead to rate hikes in the United States pushed the dollar higher and lowered Brent and WTI by 2.5% and 3.3%, respectively. Read more

On Thursday, the dollar hit nearly 16-month highs against the euro and other currencies due to bets on interest rate hikes.

“Oil trading today indicates that US dollar trends will likely take precedence over risk appetite in the future,” said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois.

US President Joe Biden said he has asked the National Economic Council to work to reduce energy costs and the Federal Trade Commission to push back against market manipulation in the energy sector.

The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report that it expects demand for oil to average 99.49 million barrels per day (bpd) in the fourth quarter of 2021, in 330,000 bpd down from last month forecast. Read more

“A slower pace of recovery in Q4 2021 is now assumed due to high energy prices,” OPEC said in the report, also citing weak demand in China and India.

OPEC sees global consumption surpass the 100 million bpd mark in the third quarter of 2022, three months later than expected last month. The producer group cited the uncertain trajectory of demand as the main reason it will not increase supply to meet calls for more crude from the United States.

“That the recognition of higher prices affecting economic activity and demand encourages the group to further increase production at a future meeting is another thing, especially with some struggling to meet production targets such they are, ”said Craig Erlam, senior market analyst at OANDA. .

Brent crude has gained over 60% this year and hit a three-year high of $ 86.70 on October 25. However, oil prices appear to be consolidating below $ 85 a barrel, Norbert Rucker, economics manager at Julius Baer, ​​said in a statement. Remark.

“We may see the first signs of a fundamental shift to a softening market, especially as demand for oil is only expected to increase gradually with the resumption of shale and oil supply in the United States. . “

Additional reporting by Ron Bousso; Additional reporting by Jessica Jaganathan; Editing Steve Orlofsky, Bernadette Baum and David Gregorio

Our Standards: Thomson Reuters Trust Principles.

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