TOKYO- Oil futures slid on Wednesday, extending losses from the previous day, as a stronger US dollar prompted fresh selling while data showing a build in US crude stocks and Shanghai’s extended lockdown fuelled fears of slower demand.
Brent crude futures fell 97 cents, or 0.9 percent, to $105.67 a barrel, while US West Texas Intermediate futures were down 98 cents, or 1.0 percent, to $100.98 a barrel. Brent fell 0.8 percent on Tuesday and WTI lost 1.3 percent.
“Higher dollar, an increase in US crude stockpile and concerns over weaker demand in China due to Shanghai’s continued lockdown added to pressure,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
“Oil prices will likely stay at around $100 a barrel for a while amid demand concerns and an expectation for no conflict in the Middle East during the Muslim fasting month of Ramadan, but they may rise again after Ramadan and as the US driving season kicks off,” he said.
The US dollar hit its highest in nearly two years on Tuesday, boosted by hawkish comments from Federal Reserve officials who pushed for a quick reduction in the central bank’s bloated balance sheet. A stronger dollar makes oil more expensive for holders of other currencies.
US crude and distillate stocks rose last week while gasoline inventories dipped, according to market sources citing American Petroleum Institute figures on Tuesday.
Crude stocks rose by 1.1 million barrels for the week ended April 1, against analysts’ forecast of a decline of 2.1 million barrels.
Demand worries also mounted after authorities in top oil importer China extended a lockdown in Shanghai to cover all of the financial centre’s 26 million people. – Reuters
