Oil prices saw a decline on Tuesday, influenced by a strong dollar and OPEC’s unchanged demand outlook for 2024.
West Texas Intermediate (WTI) and Brent crude experienced decreases in their prices on the New York Mercantile Exchange (Nymex).
The drop came after initial rises, spurred by expectations for the US consumer price index (CPI) for February.
The CPI data, indicating resilience, suggests the Federal Reserve might not cut interest rates in June.
Capital Economics believes high interest rates could last longer, potentially keeping the dollar strong and affecting oil prices negatively.
Additionally, Capital Economics predicts a dip in oil prices by the second half of 2024 as OPEC and its partners reduce production cuts.
OPEC’s latest report confirms this direction, showing a steady demand forecast but a lowered supply growth expectation from non-OPEC countries for 2024.
The US Department of Energy (DoE) also updated its price forecasts for Brent crude, indicating an increase for both the second quarter and the end of 2024.
The adjustments reflect ongoing shifts in the global oil market, highlighting the complex interplay of economic indicators and production decisions.