On Monday, both US WTI (West Texas Intermediate) alongside Brent crude oil futures’ prices stretched out their latest run of losing streak, as both benchmarks fell nearly 2.5 per cent over the session. However, as of Tuesday's early-morning US trading, both crude oil contracts are paring some of their yesterday's losses, rising over 1.5 per cent.
In the matter of the fact, on Monday's sharp tottering in crude oil prices came forth as US Dollar had bolstered further, while a number of emerging and major currencies fell to their multi-year lows. Conventionally, a stronger Dollar indicates a weakness in crude oil futures’ prices.
Nevertheless, latest downward spiral in the crude oil prices were almost entirely galvanized by fears of a recession, while worries of an imminent demand-crunch had added to further holocaust. Coupled with growing frets of a recession alongside a demand-crunch, an ultra-hawkish US Fed had fuelled up the fires.
Meanwhile, as the US Dollar Index has spiked to a fresh two-decade high, pressing oil prices to pummel further, a director of energy futures at Mizuho, Bob Yawger said, “It's hard for anyone to expect oil will recover in the wake of a greenback this expensive,” while adding that oil demands would likely to witness further weakness over coming months, a senior market analyst at OANDA, Craig Erlam said, “With more and more central banks being forced to take extraordinary measures no matter the cost to the economy, demand is going to take a hit which could help rebalance the oil market”.
Crude oil futures falter as Dollar spikes further
Citing statistics, in the day’s commodity market wind-down, UK crude oil futures scheduled to be expired by November ended 2.4 per cent lower to $84.06 a barrel. Besides, US WTI crude oil contracts due to be expired by November dipped 2.3 per cent to $76.71 a barrel, the lowest level since January 6.