Oil prices trade sideways amid stronger dollar and worries about China’s economy, according to Investing.com

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Investing.com – Oil prices fell to a more than two-month low in Asian trading on Wednesday as signs of an unexpected build in U.S. oil inventories raised doubts that supplies will remain tight to what extent?

Data showed that U.S. crude oil inventories increased by 11.9 million barrels (mb) in the week ended November 3, exceeding the expected decrease of 300,000 barrels.

Data shows U.S. inventories are building as fuel demand slows, especially amid winter restrictions on travel. The API data heralds similar official results – the Energy Information Administration has delayed its release to November 13.

The inventory data added to concerns about an oil market tightening, a day after Bloomberg data showed Russian oil exports hit a nearly four-month high last month.

Recent data also showed OPEC production increased in October despite Saudi Arabia and Russia vowing to maintain ongoing supply cuts until the end of the year.

At the same time, data showed that the economy of China, the largest importer of crude oil, continued to weaken. While the country’s oil imports held steady in October, the larger-than-expected drop in the data points to continued weakness in the country’s biggest economic engine.

China’s fuel exports also fell as domestic refineries appeared to have exhausted their export quotas.

China has been steadily adding oil reserves this year, which could lead to lower crude demand in the coming months. The country’s report on Thursday is expected to provide more details on the economy, which has struggled this year.

As of 20:47 ET (01:47 GMT), January expiration prices fell 0.3% to $81.33/barrel, and December expiry prices fell 0.5% to $76.98/barrel.

Copper’s continued recovery from six-week lows also weighed on oil markets this week as a series of Federal Reserve officials lowered expectations that the central bank will not raise interest rates further.

Expectations that the Fed will pause on raising interest rates have increased due to weakening hawkish signals from the Fed and weak non-farm payrolls data last week. However, central bank officials spoke this week warning that the U.S. economy’s resilience and stubborn inflation could prompt the Fed to raise policy rates.

So the focus this week is on one presentation later in the day and another on Friday. Markets will wait to see whether Powell maintains his hawkish comments as the Fed chairman warned that U.S. interest rates will remain higher for longer.

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