BEIJING- Oil prices extended losses into a second straight session on Tuesday on technical correction after last week’s rally, while forecasts for ample supply and a firm dollar also weighed.
Brent futures fell 28 cents, or 0.37 percent, to $76.02 a barrel, while US West Texas Intermediate (WTI) crude fell 33 cents, or 0.45 percent, to settle at $73.23.
Both benchmarks rose for five days in a row last week and settled at their highest levels since October on Friday, partly due to expectations of more fiscal stimulus to revitalize China’s faltering economy.
“This week’s weakness is likely due to a technical correction, as traders react to softer economic data globally that undermines the optimism seen earlier,” said Priyanka Sachdeva, senior market analyst at Phillip Nova, referring to bearish economic news from the US and Germany.
“Additionally, the dollar’s strength is catching up with market sentiment and appears to be trimming the current gains in oil prices,” Sachdeva said.
The US dollar wavered but remained close to the two-year peak it touched last week amid uncertainty around the extent of tariffs from the incoming Trump administration.
A stronger dollar makes oil more expensive for holders of other currencies.
Rising demand from non-OPEC countries, coupled with weak demand from China, are expected to keep the oil market well supplied next year, and that has also capped price gains.
“The move higher in crude oil prices appears to be running out of momentum,” ING analysts wrote in a note.
