Oil closes down with economic uncertainties and high dollar

Oil closes down with economic uncertainties and high dollar

The most liquid oil futures contracts closed lower this Friday (27), after data in the United States reinforce uncertainties about the economic picture. The commodity even rose at the beginning of the day, but the strengthening of the dollar throughout the session threw asset prices into the negative territory.

On the New York Mercantile Exchange (Nymex), WTI oil for March 2023 closed down 1.64% (US$1.33), at US$79.68 a barrel, while Brent for April, traded on the Intercontinental Exchange (ICE), closed down 1.0% (US$ 0.88), at US$ 86.40 a barrel. In the weekly variation, the falls form 2.4% and 1.40%, respectively.

According to analyst Edward Moya, from Oanda, oil prices fluctuate around the level of US$ 80 per barrel, as the market seeks clarity regarding the next steps of the Federal Reserve (Fed) and the Organization of Exporting Countries of Oil and allies (OPEC).

“Another round of US data showed the potential for a soft landing, but this will likely end with a hawkish Fed that is determined to bring inflation down,” he said.

The publication of US consumer spending and personal income indicators even led Capital Economics to cut its projections for the Gross Domestic Product (GDP) for the first quarter of 2023, noting that the country may already be in recession, which concerns the demand for oil.

However, despite the risks of a contraction in the main economies, the executive director of the International Energy Agency (IEA), Fatih Birol, said today, at an event, that oil prices could still rise in the international market.

In Ritterbusch’s view, investors are also awaiting the meeting of the Organization of Petroleum Exporting Countries (OPEC) next week and the next decision by the Federal Reserve (Fed). According to analysis, markets “may still need to price in some reduction in Russian oil production, given the expected difficulty in acquiring alternative customers for diesel fuel and as tanker availability becomes a bigger issue”.

Today, US Treasury Secretary Janet Yellen said the country and the European Union are in discussions over a price cap on Russian oil.

Source: CNN Brasil