ALBAWABA – The United States (US) dollar slipped to a one-month low as oil prices picked up slightly on Tuesday, amid predictions by the International Energy Agency (IEA) that oil demand will peak by 2023, news agencies reported.
Though oil prices were broadly stable on Tuesday, Brent crude futures rose $0.09 to $89.92 a barrel by 0847 GMT, according to Reuters, and West Texas Intermediate crude futures inched up $0.04 to $85.53.
Both oil benchmarks fell more than 2% percent on Monday as Israeli occupation forces stepped up military efforts in Palestine’s Gaza and intensified airstrikes.
Meanwhile, there were fresh signs of weakness for the wider economy, with economic data signalling that the Euro Zone might be in recession, Bloomberg reported.
Weaker economies reflect negatively on oil demand, as would a stronger US dollar.
However, the US dollar took a bit of a tumble Monday through Tuesday, having slid to the lowest since September 22, standing at 105.35 earlier in the session, as reported by Reuters.
The euro also lost ground and was last 0.12 percent lower at $1.0656, having traded roughly 0.1 percent higher at $1.0684 before the German and Eurozone purchasing managers' index survey data was released.
Data showed the Eurozone has been struggling in October, with HCOB's flash Eurozone Composite Purchasing Managers' Index (PMI), compiled by S&P Global, falling to 46.5, from September's 47.2.
A stronger US dollar weighs down on oil prices - Shutterstock
According to Reuters, it’s the lowest since November 2020, and further decline could undermine the IEA’s predictions.
The world will consume as much as 102 million barrels a day of oil by the late 2020s, with the volumes dropping to 97 million barrels a day by mid-century, Bloomberg reported.
The agency’s predictions are constructed according to the base-case, called the Stated Policies Scenario, which was laid out on Tuesday in the IEA’s annual World Energy Outlook.
“The transition to clean energy is happening worldwide and it’s unstoppable,” IEA Executive Director Fatih Birol said in a statement, as carried by the New York-based news agency.
“Claims that oil and gas represent safe or secure choices for the world’s energy and climate future look weaker than ever,” he added.
However, as things stand, demand for fossil fuels is set to remain far too high to keep within reach the Paris Agreement goal of limiting the rise in average global temperatures to 1.5 degrees Celsius, according to the IEA.
By 2030, the IEA expects there to be almost 10 times as many electric cars on the road worldwide, and it cited policies supporting clean energy in key markets as weighing on future fossil fuel demand.
