Oil Edges Higher With Weaker Dollar and Supply Halts in FocusMay 11, 2023 by Bloomberg
(Bloomberg) -- Oil advanced for the fourth session in five as easing US inflation weakened the dollar and traders assessed interruptions to supplies.
West Texas Intermediate rose above $73 a barrel, after losing 1.6% on Wednesday. US inflation showed signs of moderating in April, giving the Federal Reserve room to pause its aggressive monetary tightening campaign. That’s undermining the US dollar, aiding commodities that are priced in the currency.
Crude supplies from Canada have been hit by a spate of wildfires across Alberta. In the Middle East, Iraq said that it’s still waiting for Turkey to restart exports via Ceyhan port as a protracted stoppage drags on.
Crude has lost about 9% this year as worries over Fed tightening and a potential US recession outweighed the boosts from a surprise output cut by the Organization of Petroleum Exporting Countries and its allies, as well as a US plan to refill strategic reserves. Later Thursday, OPEC will issue its monthly outlook offering insights into how the market may shape up in the second half.
“China’s latest inflation data showed signs of uneven recovery,” said Ravindra Rao, head commodity research at Kotak Securities Ltd., referring to figures issued Thursday that showed price increases in the key crude importer running at the weakest pace in two years. Despite that, the “ongoing supply disruptions from Iraq and Canada provided a floor for prices,” he said.
A US crude market report on Wednesday offered a mixed picture on supplies. Nationwide commercial crude stockpiles rose by nearly 3 million barrels last week, with inventories at the key Cushing, Oklahoma, hub also expanding. Still, gasoline and distillate stockpiles contracted, according to Energy Information Administration data.
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