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Bearish Sentiment Is Dominating Oil Markets

Steep gasoline and diesel inventory draws in the United States have helped offset the overwhelmingly bearish sentiment in the oil market, although it wasn’t enough to halt the decline in oil prices. With China posting its seventh successive month of refinery run declines and Jerome Powell cooling down expectations on U.S. interest rate cuts, Brent below $72 per barrel feels justified.

The Strong Dollar Is Back and Weighing on Oil Prices

Crude oil prices fell 2.5% this week due to softening demand projections, a strong U.S. dollar, and rising supply expectations. Amid global economic uncertainty, reports from the U.S. Energy Information Administration (EIA), the International Energy Agency (IEA), and OPEC are collectively highlighting a bearish outlook, particularly as non-OPEC supply growth appears likely to outpace sluggish demand.