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Oil Prices Broadly Flat After Falling On Dollar Surge

FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford/File Photo
FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford/File Photo
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Oil Prices Broadly Flat After Falling On Dollar Surge

FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford/File Photo
FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford/File Photo

Oil prices were largely steady on Thursday, with traders holding fire after declines earlier this week on a stronger US dollar and worries about rising supply amid slow demand growth.
Brent crude futures were down 3 cents to $72.25 a barrel at 0937 GMT. US West Texas Intermediate crude futures were down 7 cents to $68.36.
"The primary driver of oil prices, both in the near term and looking ahead, will be the direction of the US dollar," said Phillip Nova investment analyst Danish Lim.
The dollar's recent rally has been a key downside pressure, said Lim, who expects oil markets to stay volatile, with a bearish bias.
The dollar surged to a one-year high on Thursday, extending gains from Wednesday's seven-month high against major currencies after data showed US inflation in October increased in line with expectations.
This, in turn, stoked worries of slowing demand in the United States.
The market is "a concoction of weak demand factors", with the latest worry being a rally in US 10-year Treasury yields and a surge in the 10-year breakeven inflation rate to 2.35%, said OANDA senior market analyst Kelvin Wong.
"(This) increases the odds of a shallow Fed interest rate cut cycle heading into 2025 (and) overall, there is less liquidity to stoke an increase in demand for oil," he added.
The US Energy Information Administration has slightly raised its global oil output forecast for 2024 to 102.6 million barrels per day (bpd), from a prior forecast of 102.5 million bpd, driven by an expected increase in US output of 300,000 bpd. For 2025, it expects world output of 104.7 million bpd.
The International Energy Agency's oil market report is due later in the day.
With slowing demand in China, there are few supply-demand factors supporting bullish oil markets, said independent market analyst Tina Teng.

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Oil Slips on Sverdrup Field Restart, Geopolitical Fears Support

FILE PHOTO: Oil pump jacks are seen at the Vaca Muerta shale oil and gas deposit in the Patagonian province of Neuquen, Argentina, January 21, 2019. REUTERS/Agustin Marcarian/File Photo
FILE PHOTO: Oil pump jacks are seen at the Vaca Muerta shale oil and gas deposit in the Patagonian province of Neuquen, Argentina, January 21, 2019. REUTERS/Agustin Marcarian/File Photo
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Oil Slips on Sverdrup Field Restart, Geopolitical Fears Support

FILE PHOTO: Oil pump jacks are seen at the Vaca Muerta shale oil and gas deposit in the Patagonian province of Neuquen, Argentina, January 21, 2019. REUTERS/Agustin Marcarian/File Photo
FILE PHOTO: Oil pump jacks are seen at the Vaca Muerta shale oil and gas deposit in the Patagonian province of Neuquen, Argentina, January 21, 2019. REUTERS/Agustin Marcarian/File Photo

Oil slipped on Tuesday pressured by the restart of production at Norway's Johan Sverdrup oilfield, although investor caution arising from fears of an escalation in the Russia-Ukraine war limited the decline.
Equinor has resumed partial production from the oilfield, Western Europe's largest, following a power outage. An outage at the North Sea field helped prices to climb by over 3% on Monday, Reuters reported.
Brent crude futures were down 45 cents, or 0.6%, to $72.85 a barrel by 0915 GMT, while US West Texas Intermediate crude futures slipped by 46 cents, or 0.7%, to $68.70.
"I guess the partial restart of the Sverdrup field is the driver of the setback, as well as a slightly stronger US dollar," said Giovanni Staunovo, analyst at UBS.
The US dollar edged up on Tuesday to within striking distance of its one-year high. A strong dollar makes commodities like oil more expensive for other currency holders and tends to weigh on prices.
Another continuing outage provided support. Kazakhstan's biggest oilfield, Tengiz, has reduced oil output by 28% to 30% for repairs which are expected to be completed by Saturday, the country's energy ministry said.
A rise in geopolitical tensions also supported prices.
In a significant reversal of policy, US President Joe Biden's administration allowed Ukraine to use the U.S.-made weapons to strike deep into Russia, two US officials and a source familiar with the decision said on Sunday.
The Kremlin said on Monday that Russia would respond to what it called a reckless decision by the Biden administration, having previously warned that such a decision would raise the risk of a confrontation with the US-led NATO alliance.
Investors are wary, said Toshitaka Tazawa, an analyst at Fujitomi Securities, as they are "assessing the direction of the Russia-Ukraine war after the weekend's escalation".
While oil's outright price has found support this week, the market structure has weakened. US crude flipped to contango for the first time since February on Monday in a sign that supply tightness was easing.