By Florence Tan
SINGAPORE (Reuters) – Oil prices fell slightly on Monday for the second consecutive session, weighed down by the strengthening of the dollar while expectations of interest rate cuts were further pushed back following good employment figures in the States -United Friday.
Brent crude futures and U.S. West Texas Intermediate crude futures slipped 4 cents to $79.58 and $75.49 a barrel, respectively, at 0036 GMT.
Data on Friday showed the United States added more jobs than expected last month, leading investors to lower their expectations for rate cuts and sparking a rally in the dollar. [FRX/]
A stronger greenback makes dollar-denominated commodities, like oil, more expensive for holders of other currencies.
The euro was also under pressure, reflecting uncertainty in the euro zone after French President Emmanuel Macron called snap parliamentary elections later in June after being defeated in the European Union vote by the Democratic Party. far right of Marine Le Pen.
“When it comes to Macron and the election, this creates another layer of uncertainty, after the surprise rise in US non-farm payrolls saw yields soar,” said analyst Tony Sycamore at IG based in Sydney.
Markets are focused on the U.S. Federal Reserve and Bank of Japan meetings this week, with the risks of more hawkish outcomes, Sycamore said.
“This will likely create even more angst among some OPEC+ member states over when they will be able to inject their cuts back into the market given the negative reception this proposal received last week following the OPEC+ meeting “, he added.
Brent and WTI posted their third consecutive weekly loss last week on concerns that a plan to roll back production cuts by the Organization of the Petroleum Exporting Countries and their allies, a group known as ‘OPEC+, from October onwards, does not contribute to the increase in global supply.
The announcement coincided with an increase in total onshore commercial stocks of OECD crude and products to around 48 million barrels in May, compared to an average accumulation of 30 million barrels between 2015 and 2019, the cabinet said. FGE energy consultancy.
Analysts and traders expect summer holiday demand to reduce inventories and support prices.
“We continue to expect the market to strengthen and crude prices to reach average levels of US$80/barrel as we approach the third quarter of 2024, but it will likely take a convincing signal of tightening from the preliminary stock data,” FGE said.
In the United States, Washington has stepped up crude oil purchases to replenish the strategic oil reserve after falling prices.
U.S. energy companies last week reduced the number of operating oil and gas rigs to the lowest since January 2022, energy services company Baker Hughes said Friday.
In the Middle East, Iraqi Oil Minister Hayan Abdel-Ghani said progress had been made in negotiations with Kurdistan Region officials and representatives of international companies operating in the region towards a agreement to resume oil exports via the Iraq-Turkey pipeline, which once handled about 0.5% of oil. of the world’s oil supply.
(Reporting by Florence Tan; editing by Sonali Paul)
