THE PESO retreated against the greenback on Wednesday as oil prices corrected, with demand recovering on easing restriction measures amid the pandemic.

The local unit ended trading at P48.94 versus the dollar on Wednesday, weaker by two centavos from its P48.92 finish on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened the session marginally weaker at P48.925 against the dollar. Its weakest was at P49 while its strongest showing was at P48.92 versus the greenback.

Dollars traded inched up to $795.92 million yesterday from $743.4 million on Tuesday.

The slight depreciation of the peso came after an uptick in oil prices, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“Peso was slightly weaker after global crude oil prices recently at five-month highs as many economies further reopen from lockdowns,” Mr. Ricafort said in a text message.

Reuters reported that oil prices inched up on Wednesday after data released showed crude inventories in the US dropped more than market expectations, which boosted sentiment that demand is recovering in the US.

Brent crude rose 15 cents or 0.3% to $44.65 a barrel by 0206 GMT. Meanwhile, the price of West Texas Intermediate oil increased 9 cents or 0.2% to $41.70 per barrel.

Crude stocks dropped by 4 million barrels last week, the American Petroleum Institute said on Tuesday. This is more than the 2.9 million expected decline by analysts.

Meanwhile, a trader attributed the peso’s weakness to risk-off sentiment amid the progress of relief packages in the United States.

“The peso depreciated slightly amid dimming prospects of a swift passage of a household and business fiscal relief package in the US Congress,” the trader said in an e-mail.

This Thursday, Mr. Ricafort expects the peso to move around the P48.90 to P49.05 band versus the dollar while the trader gave a forecast range of P48.80 to P49. — L.W.T. Noble with Reuters