Crude oil price decline in early trade

16 Jun 2023 , 11:58 AM

Early on Friday, oil prices began to decline, pausing from the previous session, when futures rose sharply on anticipation of increased energy demand from top crude importer China.

Brent futures had down 13 cents to $75.54 per barrel, while WTI crude in the United States had fallen 10 cents to $70.52 per barrel.

The prior session saw an increase of nearly 3% for both benchmarks.

According to data released on Thursday, China’s oil refinery throughput reached its second-highest level ever in May, up 15.4% from a year earlier.

The second half of the year could see continued growth in Chinese demand for oil, according to the CEO of Kuwait Petroleum Corp.

The market’s optimism is still clouded by a dim economic picture, as China’s industrial output and retail sales growth in May fell short of expectations.

Investors were concerned that increased interest rates would weaken the economy of the United States and Europe and lower demand for oil.

On Thursday, as predicted, the European Central Bank increased interest rates to a level not seen in 22 years. In order to combat the strong inflation, it indicated more policy tightening.

Retail sales in the US unexpectedly increased in May, according to data, which also revealed that last week’s jobless claims were higher than anticipated. In relation to a basket of other currencies, the news on Thursday caused the dollar to drop to a five-week low.

Oil becomes more affordable for holders of foreign currencies as the dollar declines, which could increase demand.

The dollar index increased slightly during Friday’s early trading.

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