The prospect of a truce in Gaza took a toll on oil prices on March 22, further dented by a stronger currency and a decline in demand for gasoline in the United States. To futures contracts, the price of Brent Crude dropped by 0.5% to $85.36 a barrel. Similarly, US oil futures dropped 0.5% to $80.67 a barrel. Both Brent and WTI are expected to close the week on a modified note, following a gain of more than 3% last week.
On-land crude and primary product stockpiles at major oil hubs worldwide fell by about 12 million barrels in the first half of March, according to preliminary weekly data from FGE. This is in contrast to the average draw of 6 million barrels from 2015 to 2019, which could be optimistic for oil.
Additionally, the unexpected interest rate drop by the Swiss National Bank strengthened the outlook for global risk, and the US dollar appreciated. Demand is stifled when oil becomes more costly for investors holding other currencies due to a rising dollar.
