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OIL: Crude Moderately Lower As Fed Drives USD Strength

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Oil prices are moderately lower during APAC trading today after closing Wednesday little changed. Brent is down 0.4% to $73.08/bbl after falling to $72.83, while WTI is 0.5% lower at $69.70 off the low of $69.43. The stronger USD is weighing on dollar-denominated crude but so far it is only a muted reaction (BBDXY is slightly higher today). The Fed projected fewer rate cuts in 2025, which may add to market worries about the demand outlook, especially continued weakness in China. 

  • Crude is lower this week as the non-OPEC supply outlook, soft China data, stronger USD and prospects of a Gaza ceasefire pressured prices. Whereas a US crude drawdown and expectations of tighter sanctions on Russia and Iran provided support. Given these ongoing factors, oil prices have been range trading since October.
  • Fed Chair Powell said in the press conference that given recent easing, “our policy stance is now significantly less restrictive” and so the FOMC can “be more cautious as we consider further adjustments” to rates.
  • EIA-reported oil inventories fell 934k barrels last week. US exports increased 1.8mn barrels, highest since July, signalling robust global demand. Gasoline stocks rose 2.35mn though, fifth consecutive weekly build, while distillate fell 3.18mn.
  • Later US jobless claims, revised Q3 GDP, December Philly/Kansas Fed indices, November existing home sales and leading index. The BoE decision is announced but it is expected to be on hold. 
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Oil prices are moderately lower during APAC trading today after closing Wednesday little changed. Brent is down 0.4% to $73.08/bbl after falling to $72.83, while WTI is 0.5% lower at $69.70 off the low of $69.43. The stronger USD is weighing on dollar-denominated crude but so far it is only a muted reaction (BBDXY is slightly higher today). The Fed projected fewer rate cuts in 2025, which may add to market worries about the demand outlook, especially continued weakness in China. 

  • Crude is lower this week as the non-OPEC supply outlook, soft China data, stronger USD and prospects of a Gaza ceasefire pressured prices. Whereas a US crude drawdown and expectations of tighter sanctions on Russia and Iran provided support. Given these ongoing factors, oil prices have been range trading since October.
  • Fed Chair Powell said in the press conference that given recent easing, “our policy stance is now significantly less restrictive” and so the FOMC can “be more cautious as we consider further adjustments” to rates.
  • EIA-reported oil inventories fell 934k barrels last week. US exports increased 1.8mn barrels, highest since July, signalling robust global demand. Gasoline stocks rose 2.35mn though, fifth consecutive weekly build, while distillate fell 3.18mn.
  • Later US jobless claims, revised Q3 GDP, December Philly/Kansas Fed indices, November existing home sales and leading index. The BoE decision is announced but it is expected to be on hold.