Oil prices retreated on Wednesday, as the rise in the dollar dampened investors’ appetite while traders pulled some money off the table after crude rose to its highest levels in several months in the previous session.
With the US dollar index rising for the fifth consecutive session after recent data pointed to resilience in the US economy, the cost of oil increased for investors holding other currencies, weakening demand.
Traders are looking to the Federal Reserve’s interest rate announcement later on Wednesday for signals on the interest rate path for the rest of the year. The market also reassessed the impact of Ukrainian drone attacks on Russian refineries on crude oil supplies.
Trade sources told Reuters on Tuesday that a reduction in Russian refining capacity due to strikes led to an increase in crude oil exports from the country. They added that oil exports from Russia’s western ports would increase by about 260,000 barrels per day in March compared to the initial monthly plan to 2.22 million barrels per day.
The American Petroleum Institute reported that US crude oil and gasoline inventories fell last week, while distillate inventories rose according to sources. A Reuters poll of analysts forecasted a rise in inventories by around ten thousand barrels last week. Official inventory data from the US Energy Information Administration is scheduled to be released at 1430 GMT on Wednesday.
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Shady Fouad is a technical analyst at LDN Company
Shady's strategic vision in the currency markets is reinforced by more than fifteen years of trading experience, which enables him to blend economic and technical analyzes with high efficiency, and find the best investment ideas for traders.
