May 15, 2023 (MLN): Oil prices cooled off in the Asia trading session on Monday as the optimism about lower oil supply due to OPEC+ reductions and U.S. stockpiling was balanced by the worries about lower fuel consumption in the U.S. and China.
Brent crude climbed 0.4% to $74.26 per barrel, while West Texas Intermediate crude (WTI) rose 0.39% to $70.27 per barrel.
This meager increase comes after both benchmarks fell for three consecutive days and closed the last week red as well, marking a decline for four consecutive weeks.
Moreover, the U.S. dollar index (DXY) surged by 1.4% last week, which makes dollar-denominated oil expensive for investors holding other currencies, and has also contributed to the fall in oil prices.
Tina Teng, a market analyst at CMC Markets stated that oil prices are still under pressure on sluggish demand outlooks as China's economic reopening progress seems bumpy, as reported by Reuters.
She added that investors will look closely at China’s various economic indicators for the next week, such as industrial production, capital spending, and consumer spending, to see if oil demand is getting better.
Energy Secretary Jennifer Granholm said on Thursday that the U.S. might resume buying oil for its emergency stockpile (SPR) once it finishes selling some of it in June as required by Congress.
Meanwhile, the Group of Seven (G7) nations plan to tighten sanctions on Russia at their summit in Japan’s Hiroshima this week.
