Upward pressure
The US Energy Information Administration (EIA) has raised its oil demand forecast for 2023. It now expects global liquid fuel consumption to average 100.9 million b/d this year. That is a 400,000 b/d upward revision from its February projection.

US commercial crude oil stocks declined by 1.7 million bbls in the week to March 3, according to the EIA data. The US crude inventories have recorded a draw after almost 10 straight weeks of stock builds.

Downward pressure:
The US dollar climbed to three-month highs against a basket of currencies after hawkish comments from US Federal Reserve (Fed) Chairman Jerome Powell. Powell said the central bank was “prepared to increase the pace of [interest] rate hikes” if necessary. High interest rates discourage borrowing and spending, which can lead to a decline in economic activity, and eventually lead to a recession.

European Central Bank President Christine Lagarde has also warned of another 50-basis point hike in the central bank’s key interest rate in an interview with the Spanish TV channel Antena 3.

“Crude prices can’t shake off fears that the Fed is going to send the US economy into a bad recession,” said Craig Erlam, senior market analyst at OANDA. “Optimism over the Chinese recovery is one thing but if large parts of the global economy are going to stall or go into recession, oil prices are going to struggle to surge higher,” he added.
Source: Engine Technologies