Oil Prices Continue to Weaken on Stronger U.S. Dollar, Contraction in China Imports and Exports
 
Global oil prices declined after five days of steady gains on a stronger U.S. dollar and weak oil data from top crude importer China.
 
On Tuesday, Brent crude futures fell 57 cents, or 0.66%, to settle at $85.61 a barrel. Meanwhile, U.S. West Texas Intermediate crude futures fell 52 cents, or 0.65%, to settle at $79.94.
 
In a speech to Congress, Federal Reserve Chairman Jerome Powell expressed confidence that the Fed is on track to keep inflation on a steady decline toward its 2% target.
The statement caused the US dollar to rally, which in turn reduced demand for dollar-denominated oil from buyers paying in other currencies.
 
Further pressure came from a contraction in Chinese exports and imports in January and February, including crude imports. Despite the lifting of COVID-19 restrictions, foreign demand remained weak.
 
However, the decline in oil prices was limited by supply concerns. Chevron Chief Executive Mike Wirth told a conference in Houston on Monday that the global market was vulnerable to unexpected supply disruptions because there was “not a lot of capacity” available.
 
The impact of the oil price decline is also being felt by oil producers around the world, who are under pressure to maintain their profit margins.
 
However, the situation is manageable. Oil producers must pay attention to the global economic and political situation and maintain good relations with their trading partners.
 
By doing so, oil producers can minimize their risks and maximize their profits.

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