Oil futures fell early Wednesday, feeling pressure as the U.S. dollar held near a one-month high and traders continued to play down worries over the potential for a wider conflict in the Middle East that could hit crude supplies.
Price moves
-
West Texas Intermediate crude for February delivery
CL00,
-2.28% CL.1,
-2.28% CLG24,
-2.28%
fell $1.51, or 2.1%, to $70.89 a barrel on the New York Mercantile Exchange. -
March Brent crude
BRN00,
-2.01% BRNH24,
-2.01% ,
the global benchmark, dropped $1.52, or 1.9%, to $76.77 a barrel on ICE Futures Europe.
Market drivers
Oil prices remain on edge, but have yet to break out from
a three-week trading range, “suggesting the market remains
fundamentally fragile,” said Peter Cardillo, chief market economist at Spartan Capital, in a note.
“On the other hand, a full breakout of the war against Israel from other Middle Eastern nations would disrupt the supply chain and send oil prices skyrocketing,” he said.
Traders so far have largely looked past the threat of supply disruptions, even after a U.S.-led coalition delivered strikes against the Houthis after the militants defied an ultimatum to halt attacks on shipping.
The ICE U.S. Dollar Index
DXY,
a measure of the currency against a basket of six major rivals, rose Tuesday to a roughly one-month high after Federal Reserve Gov. Christopher Waller said monetary policymakers would be in no rush to deliver rate cuts in 2024.
A stronger U.S. currency can make dollar-priced oil more expensive to overseas buyers.
Official data released Wednesday showed that the Chinese economy grew 5.2% for 2023, surpassing the target of “about 5%” that the government had set, following a pickup in growth in the fourth quarter.
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