Oil prices fell on Wednesday amid a general decline in financial markets and a strengthening US dollar, as investors assessed supply prospects, UNN reports with reference to Reuters.
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Brent crude futures fell 6 cents, or 0.1%, to $64.38 a barrel by 04:08 GMT (06:08 Kyiv time), reaching a nearly two-week low in the previous session. US West Texas Intermediate crude futures fell 10 cents, or 0.17%, to $60.46.
ANZ analysts noted in their client note on Wednesday that due to investors' reluctance to take risks, market sentiment across all markets began to shift, and Asian stocks fell on Wednesday, with volatility reaching levels not seen since April, after yesterday's Wall Street sell-off, triggered by technology assets, drew attention to elevated valuations.
The US dollar index, which measures the currency's value against the euro and pound sterling, as well as against the yen and three other currencies, remained at a three-month high, supported by disagreements within the Federal Reserve's Governing Council, indicating a low probability of an interest rate cut at the next meeting.
A stronger dollar makes dollar-denominated oil more expensive for holders of other currencies, which can affect demand. A US interest rate cut typically stimulates demand.
"Crude oil prices are falling... as risk sentiment has sharply turned negative, leading to a rise in the US dollar as a safe-haven asset. Both of these factors have put pressure on crude oil prices," said IG Market analyst Tony Sycamore in his post.
Prices were also under pressure after the American Petroleum Institute reported an increase in US crude oil inventories for the week ending October 31, sources said, citing API data released on Tuesday.
Supply concerns continued to weigh on prices. OPEC+ agreed on Sunday to increase production by 137,000 barrels per day in December. The group decided to suspend further production increases in the first quarter of 2026. However, LSEG analysts note that this suspension "is unlikely to provide significant support to prices in November and December."
OPEC itself increased production by only 30,000 barrels per day in October, compared to 330,000 barrels per day a month earlier, as the previously agreed OPEC+ production increase was offset by production declines in Nigeria, Libya, and Venezuela.