Crude oil prices rose above $83 a barrel after earlier losses, thanks to a weaker dollar that boosted commodities priced in the currency. The strengthening equities markets also 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, the 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. Despite this, demand for oil remains uncertain with weakness seen in some refined products such as diesel in Asia. Profit margins for converting crude oil into diesel are near their lowest level in almost a year making it challenging to predict future price movements.
