Florence Tan
SINGAPORE (Reuters) – Oil prices fell for a second straight day in Asia as renewed concerns about persistently high interest rates dampened investor risk appetite.
Brent crude futures were down 40 cents, or 0.5 percent, at $84.84 a barrel as of 0036 GMT after losing 0.6 percent on Friday. U.S. West Texas Intermediate crude futures were down 39 cents, or 0.5 percent, at $80.34 a barrel.
“The US dollar opened with buying orders this morning and appears to have strengthened on improved US Purchasing Managers’ Index (PMI) figures on Friday night and political concerns ahead of the French general election,” said Tony Sycamore, Sydney-based market analyst at IG.
A strong dollar makes dollar-denominated products less attractive to holders of other currencies.
But both benchmark crude futures rose about 3% last week on signs of strengthening demand for petroleum products in the United States, the world’s biggest consumer, and on supply being curbed by OPEC+ production cuts.
U.S. crude oil inventories fell, while gasoline demand rose for the seventh consecutive week and jet fuel consumption returned to 2019 levels, analysts at Australia and New Zealand Banking Group said in a note.
Geopolitical risks in the Middle East due to the Gaza crisis and increased Ukrainian drone attacks on Russian refineries are also contributing to the decline in crude oil prices.
In Ecuador, state oil company Petroecuador has declared force majeure on supplies of Napo heavy crude for export after heavy rains shut down key pipelines and wells, sources said on Friday.
The number of active oil drilling rigs in the United States fell by three last week to 485, the lowest level since January 2022, Baker Hughes said in a report on Friday.
(Reporting by Florence Tan and Sonali Paul Editing)
