Oil prices decline over 2.5% as dollar strengthens

Oil prices declined over 2.5% in European trade, recovering from two-week lows as the dollar strengthens against major rivals, with US crude stocks rise unexpectedly. 

Oil Prices

US crude fell 2.7% to $102.69 a barrel, while Brent shed 2% to $104.76 a barrel.

US crude rose 6.6% yesterday, away from two-week lows at $98.23, while Brent rose 5.8% from an April 25 low at 101.38.

The Dollar

The dollar index rose 0.7% on Thursday for the sixth straight session, hitting a 2002 high at 104.72 against major rivals. 

The gains are bolstered by very high inflation data for the US last month, paving the way for several more 0.5% Fed rate hikes this year. 

US producer prices rose 0.5% in April, matching estimates and compared to March's 1.4% rise.

Core prices, excluding  food and energy, rose 0.4%, missing estimates of 0.6%, and down from 1% in the previous reading. 

US Stocks 

Official US data showed crude inventories rose 8.5 million barrels last eek, while analysts expected a 1 million barrels deficit, with total stocks now rising to 424.2 million barrels.

Gasoline stocks fell 3.6 million barrels, down 5% from 5-year averages, while distillate stocks fell 0.9 million barrels.