Despite recent losses, oil prices climbed above $83 a barrel thanks to a weaker dollar that boosted commodities priced in the currency. Additionally, strengthening equities markets provided support to crude futures, which had been trading in a narrow range. However, market sentiment was dampened by a US inflation measure. Despite this, oil markets are still searching for an equilibrium price due to the lack of significant geopolitical news or data releases.
Crude prices have remained elevated this year, supported by supply cuts from OPEC+ and tensions in the Middle East. However, prices have retreated from recent highs as geopolitical risks have diminished. Options continue to show a bearish tilt toward puts, and the US Oil Fund, the largest oil exchange-traded fund, experienced its largest daily outflow on record.
The demand outlook for oil remains uncertain due to weakness seen in some refined products. Profit margins for converting crude oil into diesel in Asia are near their lowest level in almost a year. The market continues to be influenced by a variety of factors, making it challenging to predict future price movements.