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Oil prices down over rising value of US dollar

Oil prices were down on Thursday as the rising value of the dollar countered a massive draw in US oil inventories.

International benchmark Brent crude was trading at $55.16 per barrel at 0658 GMT for a 0.66% fall after closing Wednesday at $55.53 a barrel.

American benchmark West Texas Intermediate (WTI) was at $52.52 per barrel at the same time for a 0.62% decrease after it ended the previous session at $52.85 a barrel.

Crude oil prices, which are indexed to the US dollar, came under pressure with the rising value of the greenback.

The US dollar index, which measures the value of the American dollar against a basket of currencies including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, rose to 90.72.

The fall in prices came despite a large decline in US crude oil inventories last week, signaling a crude demand rebound in the US, the world’s largest oil consumer.

According to data released by the country’s Energy Information Administration (EIA) on Thursday, US commercial crude oil inventories fell to the lowest level since March by 9.9 million barrels, or 2%, to 476.7 million barrels, relative to the market expectation of a build of 603,000 barrels.

The surge in coronavirus cases around the world, especially in China, and the accompanying restrictions and lockdowns continue to limit mobility and raise fears over weak demand.

Investors are now keeping tabs on the wider rollout of vaccines for an effective fight against the virus.

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