ALBAWABA – Oil prices fell for a fourth day overall on Wednesday as fears eased that the genocide in Gaza will spiral into a full-blown regional war, amid rising concerns over the Eurozone economy sliding into recession.
Brent crude futures dropped $0.28 to $87.79 a barrel as of 0627 GMT, according to Reuters, and West Texas Intermediate crude futures were down $0.31 to $83.43 a barrel.
Global benchmark Brent crude dipped below $88 a barrel, and has now erased about half of its gains since the surprise Gaza attack on October 7, Bloomberg reported, WTI traded near $83.
Eurozone business activity data took a surprise downturn this month, suggesting the bloc may slip into recession, dragging on the outlook for oil demand, as reported by Reuters.
Overall, oil refineries in the Eurozone have been consuming less crude than a year ago amid lacklustre economic growth, Euroilstock data has shown.
Meantime, the Bloomberg Dollar Spot Index rose 0.2 percent as the Euro fell 0.2 percent to $1.0571 and the British pound fell 0.3 percent to $1.2121. While the Japanese yen was little changed at 149.92 per dollar.
War is a major factor in the strength of the US dollar and oil prices - Shutterstock
Efforts by the United States (US), Saudi Arabia and partners in the Middle East region reportedly prevented the genocide in Gaza from spiralling into a regional war, so far, according to Bloomberg.
Successful US diplomatic efforts have boosted the dollar as the situation gains more clarity and regional players seem to be opting out of escalating the ongoing conflict.
A stronger dollar weighs on oil prices as crude becomes more expensive to import for countries settling trade in other currencies.
More so, the industry-funded American Petroleum Institute said Tuesday that nationwide crude inventories declined by 2.67 million barrels last week, unnamed sources told Bloomberg.
Plummeting US inventories would otherwise be a potentially bullish signal for oil. But stockpiles at the Cushing, Oklahoma, storage hub, were seen rising modestly, the New York-based news agency reported. Official figures are due to come out later on Wednesday.
Away from the Middle East and the US, President Xi Jinping stepped up support for the Chinese economy, issuing additional sovereign bonds and raising the budget deficit ratio. The moves are spurring optimism in wider financial markets and could suFears that the genocide in Gaza pport demand in the world’s biggest crude importer.
