Brent Drops to $95 as US Dollar Rebounds
Ahead of December implementation day for a total ban on Russian oil by the European Union (EU), Brent crude futures declined to about $95 per barrel on Monday while the US dollar rebounded.
The market interprets a stronger US dollar to mean there will be a reduction in the crude oil demand. Recently, members of the EU indicated that the economic bloc will seize to import crude oil from Russia after Moscow’s persistent assault on Ukrainian territory.
Crude traders also added that the reversal in price from their daily highs of $97 per barrel was supported by a stronger dollar and uncertainty about a China reopening, thus keeping investors on edge.
The U.S. dollar steadied amid fading expectations of a less aggressive Federal Reserve interest rate hike after Governor Christopher Waller said the central bank was not softening its fight against inflation.
Similarly, China’s National Health Commission has recently eased some coronavirus-induced measures on the world’s top oil imported, but rising coronavirus cases over the weekend pushed back the idea of a broader and swift reopening.
Meanwhile, the prospect of even tighter supply continued to put a floor under prices after the Organisation of Petroleum Exporting Countries (OPEC) and its allies (OPEC+) agreed to cut production by 2 million barrels per day in November. READ: U.S Dollar Rebounds as Market Recovers from Weak CPI
Trading data shows that WTI crude futures settled around $88 per barrel, a decline from their daily highs of $89.9 per barrel. The European Union ban on Russian oil is set to take effect in December. # Brent Drops to $95 as US Dollar Rebounds