The U.S. Dollar Index settled at 99.443 on May 30, up 0.339 points or 0.34% from the prior week. It touched a weekly high of 100.540 before easing slightly into the close. The firmer dollar added pressure to oil prices, making crude more expensive for buyers using other currencies.
Despite the end-of-week pullback, the overall rise in the dollar served as a headwind, capping any upside potential for crude, even as U.S. inventories tightened.
China and Eurozone Economic Data Reinforce Demand Pessimism
China’s official manufacturing PMI rose modestly to 49.5 in May from 49.0 in April but remained below the key 50 level, signaling a second consecutive month of contraction. In the Eurozone, the HCOB composite PMI fell to 49.5, down from 50.4 in April, indicating contracting private sector activity led by a slowdown in services. These figures reinforced market concerns that major economies are not consuming oil at a pace sufficient to justify current supply levels.
All Eyes on OPEC+ as Market Prepares for Potential Output Increase
The focus now shifts to the June 2 OPEC+ meeting, where the group is expected to decide whether to begin unwinding voluntary production cuts. A proposed increase of 411,000 barrels per day in July is under consideration.
