WTI crude is trading close to $58.20 early Wednesday in Asia. Oil’s losing steam, and the main culprit is the US Dollar. After fresh US job data surprised everyone, the Dollar got a boost. Since oil’s priced in Dollars, a stronger Dollar usually makes crude more expensive for buyers using other currencies, so demand slips and prices fall.
Traders are keeping an eye on the US Energy Information Administration’s weekly crude inventory report, which lands later today. The numbers will likely set the tone for where oil heads next.
U.S. Job Openings Beat Expectations and Support the Dollar
The JOLTS report showed job openings rose to 7.67 million in October, a touch higher than last month and well above analysts’ expectations. It’s another sign the US job market isn’t cooling off, and that’s good news for the Dollar. When the Dollar strengthens, commodities like oil—priced in Dollars—tend to slide. That’s exactly what’s playing out now.
Iraq Oilfield Restarts, but Inventories Take a Hit
On another front, WTI faces more pressure after Lukoil’s West Qurna-2 oilfield in Iraq came back online. Output had paused because of a pipeline leak, but now production is back, adding more than 460,000 barrels a day—nearly 9% of Iraq’s total oil output.
Still, not everything points down. US crude stocks fell steeply in recent days, according to the American Petroleum Institute. Stocks declined last week by 4.8 million barrels, a far more substantial decline than the anticipated 1.7 million barrels. If this becomes a trend, diminished supplies could help to pull down WTI prices over the next few weeks.
