Oil hovers near two-week high amid mounting pressures

Global oil prices rose in European trade on Wednesday, maintaining gains for the eighth session in a row and approaching two-week highs, while still under pressure from higher US inventory buildup according to American Petroleum Institute data.

Now traders await official inventory data later today from the EIA, expected to show another buildup. 

Prices are also pressured by a dollar’s rally against major rivals, making dollar-denominated commodities costlier to holders of other currencies. 

Global Prices Today

US crude rose 0.6% to $78.13 a barrel, while Brent added 0.7% to $83.12 a barrel, with a session-low at $82.35. 

US crude rallied 1.15% on Tuesday, marking the seventh profit in a row, and scaling two-week highs at $78.44, as Brent rose 0.75% to $83.20, a January 29 high. 

Opec Forecasts 

OPEC released its monthly report today, maintaining its forecasts for global oil demand growth in 2024 at 2.25 million bpd, hitting a potential total of 104.40 million bpd. 

US Inventories 

Initial data from the American Petroleum Institute showed commercial crude stocks surged 8.5 million barrels in the week ending February 9, the second weekly increase in a row, passing estimates of 3.3 million barrels. 

Thus total stocks rose to 442.1 million barrels, the highest since the week ending January 12, a negative sign for demand in the US. 

Now investors await official data later today from the EIA, still expected to show a buildup of 3.3 million barrels.

The Dollar 

The dollar index rose 0.1% on Wednesday, extending gains for the third straight session and hitting three-month highs at 104.98 against a basket of major rivals.

The gains came after strong US consumer prices, which beat expectations for January and showed persistent inflationary pressures on Fed policymakers. 

Such data reduced the odds of a US interest rate cut in March to just 9%, while the odds of such a cut in May tumbled to just 37%.