Oil crawls up as dollar weakens, gasoline demand surges

Oil crawls up as dollar weakens, gasoline demand surges By Reuters

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Commodities 25 minutes ago (Mar 23, 2023 16:15)

By Shariq Khan

BENGALURU (Reuters) -Oil prices edged higher on Thursday days after hitting their lowest since late 2021, supported by rising gasoline prices in the United States and a weaker dollar which fed fuel demand hopes.

Brent crude futures rose 15 cents, or 0.2%, to $76.84 a barrel by noon EDT (1600 GMT), while the U.S. West Texas Intermediate crude futures were up by 6 cents, or 0.1%, to $70.96 a barrel.

{{2126|The dodollar index traded at its lowest since Feb. 3, a day after the Federal Reserve hinted it was nearing a pause in its interest rate-hike cycle. A weaker greenback makes dollar-denominated oil more attractive to holders of foreign currencies, lifting demand.

Federal Reserve policymakers believe beating back inflation may require just one more interest-rate hike this year but less easing next year than most thought would be appropriate just three months ago.

Further support for crude oil came from RBOB gasoline futures trading at a 10-day high on Thursday after the U.S. Energy Information Administration said stockpiles of the product fell by the most last week since September 2021. [EIA/S]

Higher gasoline demand will encourage refiners to use more crude oil to turn it into the road transportation fuel, Mizuho analyst Robert Yawger said.

“That large draw of 6 million barrels in EIA’s report has left a big impact on the market as the gasoline situation is looking a bit tight here,” Yawger said.

Also supportive, Goldman Sachs (NYSE:GS) said on Thursday that demand from China, the world’s biggest oil importer, continued to surge across the commodity complex, with oil demand topping 16 million barrels per day.

The bank forecast Brent to reach $97 a barrel in the second quarter of 2024.

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