# Oil slumps on economic data, stronger U.S. dollar Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-02-03 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Oil Prices Slide as U.S. Factory Orders Dip and Dollar Meta Description: Oil prices dip on U.S. factory data and dollar strength impacting demand, with Brent crude down 0.8% and WTI down 0.7% as Fed hikes rates. URL: https://financedigest.com/oil-slumps-on-economic-data-stronger-u-s-dollarhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-02-02t013143z2lynxmpej1101drtroptp4usa-congress-spr-1736814490134-compressed.jpg) By Laila Kearney NEW YORK (Reuters) -Oil prices settled lower on Thursday as U.S. industrial-linked factory orders dipped, while the dollar strengthened, making crude more expensive for non-American buyers. Brent crude futures settled at $82.17 a barrel, shedding 67 cents, or 0.8%. West Texas Intermediate crude (WTI) settled at $75.88 a barrel, down 53 cents, or 0.7%. While new orders for U.S. manufactured goods rose broadly in December, orders for industrial equipment and other machinery fell, according to the latest Commerce [Department data](https://www.financedigest.com/data-analytics-scenario-planning-and-the-finance-department.html "Data analytics, scenario planning, and the finance department"). It was highlighting more [slowing in the economy](https://www.financedigest.com/thomson-reuters-keeps-outlook-but-wary-of-slowing-economy.html "Thomson Reuters keeps outlook, but wary of slowing economy"), particularly on the industrial side, which is a negative for petroleum,” said John Kilduff, a partner at Again Capital. A rebound in the dollar index, which hit a [nine-month low](https://www.financedigest.com/dollar-falls-to-nine-month-low-as-powell-notes-progress-in-disinflation.html "Dollar falls to nine-month low as Powell notes progress in disinflation") earlier in the session on softer U.S. Federal Reserve [rate hike](https://www.financedigest.com/oil-up-2-as-dollar-weakens-on-small-us-fed-rate-hike.html "Oil up 2% as dollar weakens on small US Fed rate hike") bets, also weighed on oil prices, according to Jim Ritterbusch of Ritterbusch and Associates. A stronger greenback makes dollar-priced oil more expensive for holders of other currencies. The [Fed raised its target interest rate](https://www.financedigest.com/shares-fall-with-oil-prices-amid-concerns-about-u-s-fed-rate-hikes.html "Shares fall with oil prices amid concerns about U.S. Fed rate hikes") by a quarter of a percentage point on Wednesday, but continued to promise “ongoing increases” in borrowing costs as part of its battle against inflation. [“Inflation has eased](https://www.financedigest.com/german-inflation-rate-to-ease-over-course-of-2023-econ-minister.html "German inflation rate to ease over course of 2023 – econ minister") somewhat but remains elevated,” the U.S. central [bank said in a statement that marked an explicit acknowledgement of the progress made](https://www.financedigest.com/fintech-v-the-banks-uneasy-bedfellows-or-a-match-made-in-heaven.html "FinTech v the Banks: Uneasy Bedfellows or a Match Made in Heaven?") in lowering the pace of price increases from the 40-year highs hit last year. While inflation appears to have slowed in major economies, the response of central banks and the speed of [reopening from COVID-19](https://www.financedigest.com/freedom-day-sydney-reopens-as-australia-looks-to-live-with-covid-19.html "‘Freedom Day’: Sydney reopens as Australia looks to live with COVID-19") lockdowns is uncertain. [“Investors have become less confident in the strength of the outlook; something we could see change repeatedly in this first quarter due to the lack of visibility on interest rates and China’s COVID transition,” said Craig Erlam, senior market analyst at OANDA](https://www.financedigest.com/oil-steadies-after-dipping-on-china-outlook-investors-await-fed-clues.html "Oil steadies after dipping on China outlook; investors await Fed clues"). Helping to keep oil from moving lower was a [European Union ban on Russian refined products set](https://www.financedigest.com/european-shares-set-for-weekly-gain-on-u-s-inflation-outlook.html "European shares set for weekly gain on U.S. inflation outlook") to take effect on Feb. 5, potentially [dealing a blow to global supply](https://www.financedigest.com/pge-signs-wind-turbine-supply-deal-for-baltica-2.html "PGE signs wind turbine supply deal for Baltica 2"). EU countries will seek a deal on Friday on a European Commission proposal to [set price caps on Russian oil](https://www.financedigest.com/oil-ticks-up-as-u-s-inflation-cools-but-prices-set-for-monthly-drop.html "Oil ticks up as U.S. inflation cools, but prices set for monthly drop") products after postponing a decision on Wednesday because of divisions among member states, diplomats said. The [European Commission proposed last week](https://www.financedigest.com/european-shares-end-five-day-losing-streak-still-down-for-the-week.html "European shares end five-day losing streak, still down for the week") that from Feb. 5 the EU apply a price cap of $100 a barrel on premium Russian oil products such as diesel and a $45 per barrel cap on discounted products such as [fuel](https://www.financedigest.com/oil-spills-and-near-misses-more-ghost-tankers-ship-sanctioned-fuel.html "Oil spills and near misses: more ghost tankers ship sanctioned fuel") oil. Meanwhile, an OPEC+ panel endorsed the producer group’s current output policy at a meeting on Wednesday, leaving production [cuts agreed last year](https://www.financedigest.com/inpost-sees-better-margin-in-poland-plans-no-job-cuts-this-year.html "InPost sees better margin in Poland, plans no job cuts this year") unchanged amid hopes of higher Chinese demand and uncertain prospects for Russian supply. [(Additional reporting by Noah Browning](https://www.financedigest.com/tailify-bolsters-leadership-team-with-addition-of-julia-burton-brown-as-commercial-director.html "Tailify bolsters leadership team with addition of Julia Burton Brown as Commercial Director") in London;Editing by Marguerita Choy, Will Dunham, Kirsten Donovan and David Gregorio) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---