But bullish activity was evidenced globally on Thursday: File Image/Pixabay
A strong U.S. dollar, which makes fuel more expensive for holders of other currencies, was said to be the main reason for oil prices on Thursday dropping yet again, this time by over 1 percent – although positive signals boosting the energy market continued to be reported.
Brent fell $1.10, or 1.4 percent, to settle at $75.86 per barrel, while West Texas Intermediate fell 97 cents, or 1.3 percent, to settle at $71.86.
Also, it became increasingly apparent on Thursday that good news for the market was now bad news for investors, the good news being strong U.S. economic data and optimism about negotiations within Washington about the debt ceiling being raised to $31.4 trillion: ANZ Research pointed out in a note that these factors "will force the Fed to kill the economy."
Rebecca Babin, senior energy trader, CIBC Private Wealth
Crude is really struggling to keep up with other risk-on assets
ANZ was referring to the fact that according to two U.S. Federal Reserve policymakers, inflation is not abating fast enough to prevent the Fed from continuing its rate hike campaign.
The Fed is not alone: Luis de Guindos, vice president at the European Central Bank, warned
that his bank will have to hike rates a bit further to return inflation to a mid-term goal of 2 percent.
However, he stressed that most of the tightening is already done.
UBS Group on Thursday became the latest institution to downsize its oil price forecast by lowering its year-end outlook for Brent to below $100 per barrel, which would still be a rebound in prices.
UBS still forecasts a 1.5 million barrel per day (bpd) market deficit in June.
More good news fuelling Thursday's good news/bad new vibe came from the International Energy Forum, which reported that global oil demand climbed by 3 million bpd to hit a record in March; also, Angola's crude exports are set to rise to 1.2 million bpd in July (an almost 20 percent rise from June), and South Korea and Taiwan refiners reportedly snapped up millions of barrels of U.S. crude.
Rebecca Babin, a senior energy trader at CIBC Private Wealth, summarized the oil trading landscape by saying, "Crude is really struggling to keep up with other risk-on assets."