Global crude prices are on the rise once again, as equities markets gain momentum and the US dollar weakens.
On Tuesday, Brent crude rose to above $68.70 per barrel, following a sharp decline that sent it plummeting to the lowest since May 21. Similarly, WTI crude slated for October delivery also jumped by more than 5%, to around $65.60 per barrel. Compared to a week ago, however, both contracts suffered one of the largest weekly losses in over nine months, as Brent and WTI fell almost 8% and 9%, respectively.
With a recent decline in the US dollar, though, crude holdings became relatively less expensive for investors of other currencies, which ultimately caused the spike in oil prices. The dollar has retreated nearly 0.5% compared to a basket of other currencies, after hitting a nine-month high last week.
“Although the oil complex has generally been able to shrug off strength in the stock market, the bullish combo of increased risk appetite and significant weakening in the US dollar indices represents a potent mix that oil has been forced to recognize,” Ritterbusch and Associates president im Ritterbusch explained to Reuters.
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.