Oil prices closed lower on Wednesday (March 29) as investors took profits following two consecutive days of gains, while monitoring oil supply in the market.
WTI crude futures were down 23 cents, or 0.3%, at $72.97 a barrel, while BRENT crude futures were down 37 cents, or 0.5%, at $78.28 a barrel.
In the beginning, WTI crude futures bounced above $73 before weakening later as investors took profits after the oil contract had risen for two consecutive working days.
The market also faced pressure from the strong dollar, which was up 0.21% at 102.6478 against a basket of six major currencies overnight. The strength of the dollar makes crude oil contracts, priced in dollars, more expensive for investors in other currencies.
Despite this, crude futures were supported during the day by a report from the US Energy Information Administration (EIA), which indicated that US crude inventories fell by 7.4 million barrels last week, more than the expected drop of 5.5 million barrels. Additionally, Iraq suspended some oil exports from Kurdistan in northern Iraq, leading investors to anticipate tight global oil market supply conditions.
The EIA data also showed that gasoline stocks fell by 2.9 million barrels last week, while analysts expected a decrease of 4.8 million barrels. However, distillate stocks, which include heating oil and diesel, rose by 300,000 barrels, while analysts had expected a drop of 2 million barrels.
Overall, the decline in oil prices on Wednesday can be attributed to investors taking profits after two consecutive days of gains. While the EIA report provided some support to oil futures during the day, the strong dollar and continued monitoring of oil supply in the market also played a role in shaping market sentiment.
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