The price of oil fell by about $0.7 per barrel, continuing yesterday's decline, and reaching its lowest level since mid-March.
Pressure on prices was exerted by data from the American Petroleum Institute, which signaled weakness in demand. Oil’s breach below its 100-day moving average is also exacerbating the latest bout of price weakness. The report showed that U.S. oil reserves rose by 509,000 barrels last week. Meanwhile, crude stocks at Cushing rose by more than 1 million barrels last week. Gasoline and distillates stocks also rose over the week. Now market participants are awaiting official data, which will be published at 14:30 GMT. Consensus estimates suggest that oil reserves decreased by 1.3 million barrels last week.
The decline in oil prices is also due to the positive dynamics of the American currencies. The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.09% to 105.51, reaching its highest level since May 2.
Oil has been in a downtrend since early April, posting losses in three of the past four weeks, as much of the geopolitical premium from tensions in the Middle East has unwound, bringing traders’ focus back to a cooling market.
Gradually, the focus of investors' attention is shifting to the OPEC+ meeting, which will be held on June 1, while market participants expect that the current oil production restrictions will be extended, possibly to the year-end.