Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Oil dips on stronger dollar with mixed demand clouding outlook

CNPC sees peak oil demand in China in 2030
CNPC sees peak oil demand in China in 2030

Oil dropped as the dollar strengthened, adding more volatility to the market which is facing a mixed demand outlook after a recent rally.

Futures in New York slid 0.8% and are set for the biggest weekly loss since December. The demand picture remains uneven across various regions, with Indian fuel sales falling in February amid higher pump prices, while demand is climbing in America and the U.K. A huge U.S. stimulus package lifted broader sentiment, but wasn’t enough to spur further gains in crude as a rising dollar reduced the appeal of commodities priced in the currency.

“The latest rally is starting to feel fragile,” said Vandana Hari, founder of Vanda Insights in Singapore. “Once sentiment from the U.S. stimulus moves into the rearview mirror, we could return to inflation worries and skittish financial markets. That casts a bearish shadow on the oil complex.”

Oil has rallied more than 35% this year as the market tightens due to output cuts from OPEC+ members and as the rollout of vaccines spurs optimism over the demand outlook. Sustained higher prices, however, might encourage a surge in U.S. production by shale drillers in a move that would add to supply concerns amid sharply-rising flows of Iranian crude into China.

The availability of crude cargoes, meanwhile, remains tight due to the OPEC+ curbs. Some oil processors in Asia will get less crude than they asked for next month from Saudi Arabia as the producer extends its unilateral output cuts. Three refiners will receive almost 20% less supply than requested.

See also: OPEC’s Shock Move to Tighten Market Leaves Oil World Divided

Prices
  • West Texas Intermediate for April delivery lost 50 cents to $65.52 a barrel on the New York Mercantile Exchange at 7:16 a.m. London time after adding 2.5% on Thursday.
    • Front-month futures are down 0.9% this week.
  • Brent for May settlement fell 0.7% to $69.13 on the ICE Futures Europe exchange after climbing 2.6% in the previous session.
    • Futures are up 0.3% this week.

The prompt timespread for Brent was 61 cents a barrel in backwardation — a bullish market structure where near-dated prices are more expensive than later-dated ones — compared with 68 cents a week earlier.

OPEC on Thursday sounded a note of caution on the outlook, trimming its forecasts for the amount of crude it will need to pump over the next two quarters. All eyes will be on an International Energy Agency report next week, which will publish forward-looking demand forecasts, while the market will also be watching for clues on the health of the U.S.-China relationship following a high-level meeting set for March 18-19 in Alaska.

Other oil-market news:
  • Europe’s diesel margin fell to its lowest since November, with U.S. refiners ramping up operations again after last month’s big freeze.
  • Since Saudi Arabia stunned the global oil market with a large cut in crude production in January, traders have been draining crude supplies from St. Lucia and Freeport in the Bahamas to capitalize on the surge in crude prices.

Recommended for you

Tags

More from Energy Voice

Latest Posts