The US dollar continues to decline against most currencies and commodities
Disappointing data continues to weigh on the US dollar
OPEC has lowered its global demand forecast for 2023
Oil prices are remaining stable near 83.00 levels
The dollar index is approaching 101.00 levels
Oil prices struggle amidst supply shortages and declining demand concerns
Oil prices faced a difficult situation during Thursday's trading session as they remained caught between supply shortages and concerns about declining demand and the global economic slowdown. Brent crude experienced a 0.10% fall, trading at $87.30 per barrel, while West Texas crude remained stable near 83.20 levels. This follows significant increases in oil prices observed the previous day after US inflation data showed a slowdown, which increased the possibility that the US Federal Reserve would begin reducing monetary tightening soon.
According to Thursday's data, China's crude oil imports rose by 22.5% in March compared to the previous year, reaching their highest levels since June 2020. Refineries intensified their production to meet the demand for fuel exports and expected local economic recovery. The global economic recovery is expected to have a significant impact on the demand for oil, and analysts are closely monitoring the situation to understand its long-term implications for oil prices.
OPEC lowers global oil demand forecast for rest of the year
OPEC has recently announced that it is lowering its global oil demand forecast for the rest of the year, reducing it by 300,000 barrels per day.
While OPEC had raised its demand estimate for the first quarter by 270,000 barrels per day in comparison to its previous report, it has now lowered its estimates for the following quarters. However, it has left its forecast for demand growth for the year unchanged at 2.3 million barrels per day, with the group projecting a total oil demand of 101.9 million barrels per day for 2023.
This revision in demand estimates seems to be in line with OPEC+'s decision to voluntarily reduce production by 1.16 million barrels per day until the end of the year.
US Dollar Continues to Decline
The US dollar continued to decline on Thursday as the dollar index fell by 0.60% to 101.40 levels. This was due to the increasing likelihood of the US Federal Reserve beginning to reduce the pace of monetary tightening soon. The decline in the dollar comes after yesterday's data showed a slowdown in inflation growth, which rose by 5%, confirming the success of the monetary policies that the US Federal Reserve resorted to last year.
Markets are now preparing for a change in those policies soon. The decline in the dollar is likely to continue as the US Federal Reserve is expected to maintain its accommodative monetary policy in the coming months.