BEIJING: Oil prices fell on Thursday as the US dollar strengthened following signs that the US Federal Reserve will tighten monetary policy in the world’s biggest oil user.
Futures pulled back amid a broader decline in financial markets triggered by the March interest rate increase telegraphed by the Fed and as the dollar climbed against its major peers. Dollar-denominated oil becomes more expensive for buyers using other currencies when the greenback gains.
Brent crude futures were down 57 cents, or 0.9 percent, to $89.18 a barrel at 0440 GMT, after earlier falling by as much as 1.1 percent to $89. Brent climbed 2 percent on Wednesday.
US West Texas Intermediate (WTI) crude futures were down 83 cents, or 0.9 percent, to $86.52 a barrel, after falling by as much as 1.2 percent to $86.34. WTI gained 2 percent in the previous session.
“It could be a strong US dollar at play after the Federal Open Markets Committee signalled rates will rise,” said Commonwealth Bank analyst Vivek Dhar.
The dollar rose on higher US Treasury yields, lifting the US dollar index, which measures the greenback against major peers, to 96.604, near five-week highs.
Crude prices surged on Wednesday, with Brent climbing to $90 a barrel for the first time in seven years, amid the tensions between Ukraine and Russia, the world’s second-largest oil producer, that has fanned fears of energy supply disruptions to Europe.
Commonwealth Bank’s Dhar echoed those concerns, listing that along with the omicron coronavirus variant not impacting oil demand as badly as initially feared and efforts by OPEC and its allies, known as OPEC+, to boost supply not materialising as supportive for oil prices.
OPEC missed its planned supply increase target in December, highlighting capacity constraints that are limiting supply as global demand recovers from the COVID-19 pandemic.
OPEC+ is gradually relaxing 2020’s output cuts as demand recovers from the demand collapse that year. But many smaller producers can’t raise supply and others have been wary of pumping too much in case of renewed COVID-19 setbacks.
“Continued supply challenges and mounting Russia-Ukraine tensions continue to support crude oil prices. It is down slightly today but I think it is nothing more than a technical move,” said Howie Lee, economist at OCBC in Singapore.
An increase in crude oil and gasoline inventories in the United States alleviated some of the concerns about supply.
Crude inventories rose by 2.4 million barrels in the week to Jan. 21 to 416.2 million barrels, compared with analysts’ expectations in a Reuters poll for a 728,000-barrel drop, the Energy Information Administration (EIA) said on Wednesday.
Gasoline stockpiles rose by 1.3 million barrels last week to 247.9 million barrels, the EIA said, the most since February 2021.
Oil falls as US Fed’s pending interest rate hike spooks investors
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Oil falls as US Fed’s pending interest rate hike spooks investors
- Futures pulled back amid a broader decline in financial markets triggered by the March interest rate increase telegraphed by the Fed and as the dollar climbed against its major peers
Saudi Arabia, Japan trade rises 38% between 2016 and 2024, minister says
RIYADH: Trade between Saudi Arabia and Japan has increased by 38 percent between 2016 and 2024 to reach SR138 billion ($36 billion), the Kingdom’s investment minister revealed.
Speaking at the Saudi-Japanese Ministerial Investment Forum 2026, Khalid Al-Falih explained that this makes the Asian country the Kingdom’s third-largest trading partner, according to Asharq Bloomberg.
This falls in line with the fact that Saudi Arabia has been a very important country for Japan from the viewpoint of its energy security, having been a stable supplier of crude oil for many years.
It also aligns well with how Japan is fully committed to supporting Vision 2030 by sharing its knowledge and advanced technologies.
“This trade is dominated by the Kingdom's exports of energy products, specifically oil, gas, and their derivatives. We certainly look forward to the Saudi private sector increasing trade with Japan, particularly in high-tech Japanese products,” Al-Falih said.
He added: “As for investment, Japanese investment in the Kingdom is good and strong, but we look forward to raising the level of Japanese investments in the Kingdom. Today, the Kingdom offers promising opportunities for Japanese companies in several fields, including the traditional sector that links the two economies: energy.”
The minister went on to note that additional sectors that both countries can also collaborate in include green and blue hydrogen, investments in advanced industries, health, food security, innovation, entrepreneurship, among others.
During his speech, Al-Falih shed light on how the Kingdom’s pavilion at Expo 2025 in Osaka achieved remarkable success, with the exhibition receiving more than 3 million visitors, reflecting the Japanese public’s interest in Saudi Arabia.
“The pavilion also organized approximately 700 new business events, several each day, including 88 major investment events led by the Ministry of Investment. Today, as we prepare for the upcoming Expo 2030, we look forward to building upon Japan’s achievements,” he said.
The minister added: “During our visit to Japan, we agreed to establish a partnership to transfer the remarkable Japanese experience from Expo Osaka 2025 to Expo Riyadh 2030. I am certain that the Japanese pavilion at Expo Riyadh will rival the Saudi pavilion at Expo Osaka in terms of organization, innovation, and visitor turnout.”
Al-Falih also shed light on how Saudi-Japanese relations celebrated their 70th anniversary last year, and today marks the 71st year of these relations as well as how they have flourished over the decades, moving from one strategic level to an even higher one.
