LONDON: Oil slipped after two sessions of gains as uncertainty about global economic outlook and firmer dollar countered investor optimism about demand in China and expectations of drop in US crude inventories.

Dollar rose as worries about corporate earnings and outlook for global economy deepened. Stronger dollar makes oil more expensive for other currency holders and tends to reflect reduced investor risk appetite.

“Recovering dollar is weighing on sentiment,” said Stephen Brennock of oil broker PVM. “I suspect that upcoming macro releases concerning US house prices and consumer confidence are also keeping buyers on sidelines.” Oil prices rise on optimism about fuel demand in China

Brent crude fell 70 cents, or 0.9 percent to $ 82.03 a barrel, while US West Texas Intermediate crude dropped 65 cents to $ 78.11. Both contracts rose over 1 percent on Monday. “General level of risk appetite has turned increasingly sour again today with losses seen across most commodity markets,” said Saxo Bank commodity strategist Ole Hansen.

Oil was up earlier in day supported by investor optimism that holiday travel in China would boost fuel demand and by expectations US inventories would show drop in crude stocks.

Still, investors remain wary about central banks in United States, Britain and European Union potentially raising interest rates further to curb inflation, which could slow economic growth and dent energy demand.

Published in The Daily National Courier, April, 26 2023

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