Oil prices extended their biggest drop in nearly two weeks as weak demand in top importer China and a stronger dollar dampened the outlook for the oil market. About this reported the Bloomberg agency.
Brent crude was trading near $72 a barrel after falling more than 2% on Friday, while West Texas Intermediate fell below $69.
Data released over the weekend showed low consumer inflation in China for October and a further decline in wholesale prices. The dollar continued to strengthen, reducing the appeal of commodities denominated in the currency, following Donald Trump's re-election last week.
The drop in oil prices is accompanied by a weakening of key market indicators. Near-term futures are trading at the lowest premium to contracts several months ahead since June, signaling an easing of short-term deficits in the market.
Oil traders are weighing the outlook for global demand in 2025, as well as the implications of Trump's return to the White House, including a stronger dollar and tensions between Israel and Iran. With an expected surplus next year, investors will get a number of important forecasts this week, starting with an estimate from OPEC on Tuesday.
"The resumption of the dollar's rally, which was temporarily suspended on Friday, leads to negative sentiment in the commodity market this morning", said Ole Hansen, Head of Commodity Markets Strategy at Saxo Bank. "The market's faith in China's support for oil prices has decreased", he added.
Following the forecast from the Organization of the Petroleum Exporting Countries (OPEC), the US Energy Information Administration will release its short-term forecast on Wednesday and the International Energy Agency the following day. In its latest report, OPEC lowered its demand forecasts.
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