Oil Price Dips as Dollar Strengthens, Demand Weakens

Storage tanks are seen at Marathon Petroleum's Los Angeles Refinery, which processes domestic & imported crude oil into California Air Resources Board (CARB) gasoline, CARB diesel fuel, and other petroleum products, in Carson, California, US, March 11, 2022. Picture taken with a drone. REUTERS/Bing Guan/File Photo
Storage tanks are seen at Marathon Petroleum's Los Angeles Refinery, which processes domestic & imported crude oil into California Air Resources Board (CARB) gasoline, CARB diesel fuel, and other petroleum products, in Carson, California, US, March 11, 2022. Picture taken with a drone. REUTERS/Bing Guan/File Photo
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Oil Price Dips as Dollar Strengthens, Demand Weakens

Storage tanks are seen at Marathon Petroleum's Los Angeles Refinery, which processes domestic & imported crude oil into California Air Resources Board (CARB) gasoline, CARB diesel fuel, and other petroleum products, in Carson, California, US, March 11, 2022. Picture taken with a drone. REUTERS/Bing Guan/File Photo
Storage tanks are seen at Marathon Petroleum's Los Angeles Refinery, which processes domestic & imported crude oil into California Air Resources Board (CARB) gasoline, CARB diesel fuel, and other petroleum products, in Carson, California, US, March 11, 2022. Picture taken with a drone. REUTERS/Bing Guan/File Photo

Oil prices retreated slightly on Thursday after gaining more than $3 in the prior session, with a strong dollar capping oil demand from buyers using other currencies and concerns over the faltering economic outlook clouding market sentiment.

Brent crude futures fell 41 cents, or 0.5%, to $88.91 per barrel by 0337 GMT while US crude futures dropped by 35 cents, or 0.4%, to $81.80.

Both benchmarks had rebounded in the prior two sessions after reaching nine-month lows this week after a temporary dive in the dollar index and a larger-than-expected drawdown of US fuel inventory raised hopes of a consumer demand recovery.

However, the dollar index trended upward again on Thursday, dampening investor risk appetite and stoking fears of a global recession.

The Bank of England said it is committed to buying as many long-dated government bonds, know as gilts, as needed between Wednesday and Oct. 14 to stabilize its currency after the British government's budgetary plans announced last week caused the sterling to tumble.

Goldman Sachs cut its 2023 oil price forecast on Tuesday, citing expectations of weaker demand and a stronger US dollar, but said global supply disappointments reinforced its long-term bullish outlook.

In China, the world's biggest crude oil importer, travel during the week-long national holiday is set to hit the lowest level in years as Beijing's persistent zero-COVID rules prompt people to stay at home and economic woes dampen spending.

Citi economists have lowered their China GDP forecast from 5% year-on-year growth to 4.6% for the fourth quarter of 2022, Reuters reported.

"Stringent zero-COVID measures and a weak property sector continue to cloud growth prospects," Citi analysts wrote in a note on Wednesday.

On the other side of the world, the European Union proposed a new round of sanctions against Russia over its invasion of Ukraine, including tighter trade restrictions, more individual blacklistings and an oil price cap for third countries.

But the bloc's 27 member countries will need to overcome their own differences to implement them.



Egypt's Net Foreign Assets Slid in October

A general view shows Tahrir Square in Cairo, Egypt July 13, 2020. (Reuters)
A general view shows Tahrir Square in Cairo, Egypt July 13, 2020. (Reuters)
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Egypt's Net Foreign Assets Slid in October

A general view shows Tahrir Square in Cairo, Egypt July 13, 2020. (Reuters)
A general view shows Tahrir Square in Cairo, Egypt July 13, 2020. (Reuters)

Egypt's net foreign assets (NFAs) dropped by $1.12 billion in October after a rise in September, central bank data shows.

NFAs declined to the equivalent of $9.21 billion at the end of October from $10.33 billion at the end of September, according to Reuters calculations based on the official central bank currency rates. The decline followed a $591 million gain in September.

Egypt had been using NFAs, which include foreign assets at both the central bank and commercial banks, to help to prop up its currency since as long ago as September 2021.

NFAs turned negative in February 2022 and only returned to positive territory in May this year.

Foreign assets rose at the central bank in October but dipped at commercial banks while foreign liabilities climbed at both commercial banks and the central bank.