By Samuel Akpan with agency report
Global oil prices took a step back on Monday, ending a five-session rally, as a robust US dollar exerted pressure on the market ahead of crucial economic updates from the Federal Reserve and the US labor market.
Brent crude futures fell by 28 cents, or 0.4%, to $76.23 per barrel, while US West Texas Intermediate (WTI) crude declined 27 cents, or 0.4%, to $73.69 per barrel.
The recent rally in oil prices was driven by optimism over increased demand due to colder weather in the Northern Hemisphere and fiscal stimulus measures in China.
However, the strengthening US dollar has tempered these gains, making oil more expensive for international buyers. The dollar hovered near a two-year high, keeping markets cautious.
Investors are eagerly awaiting key economic indicators later this week, including the minutes of the Fed’s latest meeting and the December payroll report.
These releases are expected to provide critical guidance on the Federal Reserve’s monetary policy trajectory and its implications for energy consumption.
Adding complexity to the global oil market, Saudi Aramco announced its first crude price hike for Asian buyers in February, signaling confidence in regional demand recovery despite global uncertainties.
Meanwhile, concerns over geopolitical factors, such as stricter sanctions on Iranian and Russian oil exports, could impact supply flows.
Analysts anticipate a broader supply surplus in the oil market in 2025, driven by an increase in non-OPEC supplies, including potential growth in US production.
This could offset global demand growth, with some experts suggesting that OPEC’s market-shaping power may be waning.
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