Oil closed lower today, despite the sharp drop in American stocks, amid the strength of the dollar and while tensions in the Middle East are falling out of focus.
WTI for June closed down 0.66% (US$0.55), at US$82.81 a barrel, on the New York Mercantile Exchange (Nymex), and Brent for July fell 0.40% (US $0.35), at US$87.04 per barrel, on the Intercontinental Exchange.
Today, US crude oil inventories fell for the first time in five weeks, in a much larger draw than expected, according to data from the Department of Energy (DoE). Shortly after the indicator, oil prices fluctuated close to stability, but the gains were not sustained.
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News circulated about a possible gradual Israeli offensive against the city of Rafah, Hamas’ last stronghold in Gaza. The gradual advance is a response to US and international pressure against a total and violent attack in the region. Despite this, Capital Economics highlights that the escalation of the conflict between Israel and Iran has been largely ignored by the oil market.
Meanwhile, TD Securities points out that the recent price drop has been “overwhelmingly associated” with the decrease in offering risk premiums. Now, investors await the release of the first reading of the US Gross Domestic Product (GDP) in the first quarter of this year, which could give clues about the country’s demand prospects for the commodity.
