Oil prices fell 6% for the week amid a strengthening dollar and rising inventories

Last week, oil prices fell to almost the level of early April, from which a sharp rise began after OPEC's decision to cut production. The reason for the fall was the strengthening of the dollar and good macroeconomic news from the USA. Traders expect a recession in the global economy and do not expect an increase in oil consumption in the near future, putting pressure on the prices of vegetable oils and corn.

During the week, June futures for Brent oil on the London ICE exchange fell by 5.8% to $81.6/barrel (+8.8% for the month), and for WTI oil on the New York exchange - by 5. 9% to $77.9/barrel (+12% for the month).

According to the EIA report, as of April 14, US crude oil inventories were 1.6% above the 5-year average, while gasoline inventories were 6.3% below it.

Quotations were supported by data on the US economy, where in April the S&P index of business activity in the manufacturing sector increased by 1.2 to 50.4 (although experts expected it to decrease to 49), which was the largest increase in the last 6 months. Japan Jibun Bank's index of business activity in the manufacturing sector rose 0.3 in April to a six-month high of 49.5. At the same time, the Eurozone PMI manufacturing index unexpectedly fell by 1.8 to an almost 3-year low of 45.5, while experts had forecast it to rise to 48.

Data from the State Customs Service of China add optimism to traders, according to which the import of crude oil in April increased by 16% to the highest level since June 2020 - 52.31 million tons, and in general since the beginning of the year reached 136.369 million tons, which is 6.7% higher last year's pace.

Traders believe that tightening monetary policy by the US Federal Reserve and other major central banks could worsen the state of the global economy and reduce fuel demand, so they are currently closely watching fuel consumption in the US and China to understand the state of the world's major economies.

According to the Ministry of Transport of China, during the week of April 3-9, the number of trucks on the country's highways decreased by weight by 8%.

According to S&P Global, this year the demand for diesel fuel in the US could decrease by 2%, which would be the biggest drop in the last 7 years, excluding the pandemic in 2020. This will lead to a decrease in the demand for biofuels and the crops from which they are produced: vegetable oils, rapeseed and corn.