Oil rises $1 as US dollar slips to one-week low, investors shift focus to global economy; Brent at $88/bbl

Brent crude futures rose $1.29, or 1.5 per cent, to $88.29 a barrel. US West Texas Intermediate crude futures rose $1.32, or 1.6%, to $83.22 a barrel., according to news agency Reuters. Coming to domestic prices, crude oil futures rose 1.35 per cent to ₹6,926 per barrel on the multi commodity futures (MCX). 

What’s driving crude oil prices?

-A cheaper greenback typically lifts demand for dollar-denominated oil from investors holding other currencies. Both crude oil contracts had dropped by more than a dollar early in the session on easing tensions between Israel and Iran, along with nagging concerns on demand from top oil importer China. 

-More support for prices came from Euro Zone data that showed business activity expanding at the fastest pace in nearly a year this month. Analysts said that the market has been under pressure from little to no growth out of the Euro Zone, so anything showing improvement should be supportive.

-Investors are awaiting US gross domestic product figures and March personal consumption expenditure data, the Fed’s preferred inflation gauge. A low GDP number of under three per cent could cool the Fed’s nerves some and provide less pressure to commodities. A stronger than three per cent reading could cause the dollar to rally, which would put more pressure on commodities. 

more to come

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Published: 23 Apr 2024, 11:06 PM IST