Oil Prices Dip as China's Exports Slide and US Dollar Strengthens
Here are the factors behind the shifts and the measures taken by major oil-exporting nations to stabilize prices.
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In early Tuesday trading, oil prices experienced a decline, attributed to two significant factors: China's declining export rates for October and the strengthening of the US dollar.
At 9:48 a.m. local time (0648 GMT), the international benchmark crude, Brent, was trading at $84.29 per barrel. This marked a 1.04% decrease from the previous trading session's closing price of $85.18 per barrel on Monday.
Simultaneously, the American benchmark, West Texas Intermediate (WTI), was trading at $79.94 per barrel, indicating a 1.08% increase from Monday's closing price of $80.82 per barrel.
The drop in oil prices on Tuesday was primarily driven by China's customs office report, revealing a 6.4% year-over-year decline in the country's exports, which amounted to $274.8 billion. This data underscored the sixth consecutive month of declining exports from China.
Another contributing factor was the relative strength of the US dollar compared to other currencies, which acted as a deterrent to oil price increases. The US dollar index gained 0.20% and reached 105.257, making oil more expensive for foreign currency traders.
Nonetheless, the coordinated decision by the world's largest oil exporters, Saudi Arabia and Russia, to extend their voluntary production cuts until the end of the year helped limit further price declines. Saudi Arabia implemented an additional output cut of 1 million barrels per day (bpd) on top of a previous 500,000 bpd cut, which will be in effect until December 2024. Meanwhile, Russia announced a reduction in the country's exports of oil and oil products by over 300,000 bpd in November compared to the average for the May-June period.
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