Oil prices back off four-month high as dollar heaps pressure

Global oil prices fell in European trade on Wednesday for the first time in six sessions, moving off four-month highs on profit-taking as dollar heaps pressure.

The losses are stymied by initial data that showed a drop in US crude stocks last week, with traders awaiting official EIA data later today.

Global Prices 

US crude fell 1.1% to $81.58 a barrel, with a session-high at $82.62, while Brent fell 0.95% to $86.26 a barrel, with a session-high at $87.31. 

US crude rose 0.4% on Tuesday, the fifth straight profit, scaling a four-month high at $83.09 a barrel, while Brent rose 0.4% to $87.66 a barrel, the highest since November 3, 2023. 

The Dollar

The dollar index rose 0.3% on Wednesday, extending gains for the fifth straight session and scaling a three-week high at 104.06 against a basket of major rivals. 

The gains come amid speculation that the Fed will take a bullish stance in today’s policy meeting following strong inflation data. 

The data forced traders to reduce their bets on US interest rate cuts this year from 150 basis points to 75 basis points.

US Stocks 

Initial data from the American Petroleum Institute showed commercial crude stocks fell by 1.5 million barrels in the week ending March 15, passing estimates of a million barrels drawdown. 

According to the data, total stocks thus fell to 451.1 million barrels, the lowest in five weeks and a positive sign for demand. 

Now traders await official data from the Energy Information Administration, expected to show a drop of 0.9 million barrels last week.