Oil Extends Losses Below $100 Ahead of US Inflation Data, Reports Bloomberg

Oil prices continued to decline, falling below $100 a barrel as investors await key economic data from the US and China that could indicate the overall health of the global economy.

In early Asian trading, West Texas Intermediate prices dropped further after a significant decrease of approximately 9% over the previous two sessions. Market participants are particularly focused on China’s factory gate prices for April and the US consumer-price index, with a strengthening dollar exerting additional pressure on commodity prices, including oil.

Recent months have seen volatility in the oil market driven by several factors, including Russia’s invasion of Ukraine and COVID-19 lockdowns in China. The war has intensified inflationary pressures, resulting in rising costs for various goods, including fuel, with retail gasoline prices in the US soaring to record highs as the summer driving season approaches.

Despite the recent decline, oil prices remain over 30% higher this year, benefiting from a strong start as economies recover from the pandemic. The oil ministers of Saudi Arabia and the United Arab Emirates have raised concerns about dwindling spare capacity in all energy sectors, attributing this trend to reduced investment among producers, which in turn contributes to rising prices.

The American Petroleum Institute also indicated that US crude stockpiles increased by 1.62 million barrels last week, alongside a growth in fuel inventories, with official government data expected to be released later in the week.