Oil extended losses as swelling US inventories of crude and fuels compounded weakness driven by a strong dollar.
(Bloomberg) — Oil extended losses as swelling US inventories of crude and fuels compounded weakness driven by a strong dollar.
West Texas Intermediate fell to a session low after US data showed total crude inventories rose to their highest since the summer of 2021. Refinery utilization fell as fuelmakers enter a period of heavier-than-usual maintenance. Even with more capacity offline, diesel and gasoline stockpiles rose, a bearish signal for demand.
“Fundamental forces drove inventories higher,” said Daniel Ghali, a commodity strategist at TD Securities.
Meanwhile, the dollar was robustly higher, adding pressure to commodities.
Crude is stuck in a $10 band so far in 2023, caught between the risk of a recession hitting world governments and continued optimism surrounding Chinese demand. Smaller, macro-related fluctuations have moved prices up and down, but prices remain in the narrow band as the market remains fairly balanced until either a slow down or China’s reopening comes into full force.
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