Oil prices fell on Thursday with data showing a demand decrease in the US, the world’s largest oil consumer, and with a strong US dollar, discouraging traders of other currencies.
International benchmark crude Brent traded at $89.64 per barrel at 10.06 a.m. local time (0706 GMT), a 0.54% loss from the closing price of $90.13 a barrel in the previous trading session on Wednesday.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $84.83 per barrel, down 0.66% from Wednesday’s close of $85.39 per barrel.
The Energy Information Administration (EIA) data released late Wednesday showed a jump of 1.4 million barrels in crude oil inventories, raising concerns about demand and driving down prices.
The rising value of the US dollar was another cause for the downturn in prices. When the US dollar strengthens against other currencies, dollar-indexed crude oil becomes more expensive and consequently less lucrative for holders of other currencies.
However, concerns remain about the oil supply, triggered by the conflict between Israel and Palestine. The ongoing conflict is generating fears of the possibility of a regional spillover and consequently deepening the supply deficit predicted for the rest of the year.
