Zeynep Beyza Kilic
27 March 2024•Update: 27 March 2024
ANKARA
Oil prices declined on Wednesday, with data indicating a drop in crude demand in the US, the world's biggest oil consumer, and a strong US dollar that is expected to lower global crude demand appetite.
International benchmark Brent crude traded at $84.77 per barrel at 10.34 a.m. local time (0734 GMT), a 1% drop from the closing price of $85.63 per barrel in the previous trading session.
The American benchmark West Texas Intermediate (WTI) traded at $80.79 per barrel at the same time, a 1.02% fall from the previous session that closed at $81.62 per barrel.
Prices declined during early Asian trade following the release of data reflecting bearish demand in the US.
The American Petroleum Institute late Tuesday announced an estimated increase of 9.33 million barrels in US crude oil inventories, against the market prediction of a draw of 700,000 barrels.
Official statistics from the Energy Information Administration (EIA) will be released later in the day.
A buildup in crude and gasoline stockpiles is predicted to drive oil prices down.
Tensions are growing in the Red Sea region with Houthi attacks on commercial ships suspected of having ties to Israel. In addition, US retaliatory airstrikes against Houthi targets inside Yemen are intensifying fears of significant disruptions to maritime traffic on one of the busiest global routes for oil and fuel transport.
Furthermore, the rise of the US dollar against other currencies aided the decline in oil prices, with expectations of a demand curb.
The US dollar index rose by 0.11% to 104.35. A strong dollar is projected to limit demand by making oil more expensive for foreign currency users.
Meanwhile, concerns that ongoing geopolitical tension will result in supply disruptions are supporting upward price movements.
On Monday, the UN Security Council voted for a resolution demanding an immediate cease-fire in Gaza for the holy Islamic month of Ramadan, which will end on April 9, renewing hopes of a more permanent cease-fire for the future.
However, Israel's disregard for a cease-fire demand raised concerns that the war would continue for longer, limiting the drop in prices.
