Commodities

Oil prices fall as the dollar rises, but there is a weekly gain due to supply concerns by Stocksak


© Stocksak. FILEPHOTO: On February 11, 2019, pump jacks operated at sunset in Midland Texas, U.S.A. Picture taken February 11, 2019, REUTERS/Nick Oxford/File Photograph

By Sonali Paul

MELBOURNE (Stocksak), – While oil prices fell on Friday due to a stronger dollar and were still on track for a weekly gain, they are expected to rise this week as a result of concerns about supply tightening in Europe due to the upcoming cut-off of Russian imports.

Futures fell 42 cents or 0.4% to $96.54 per barrel at 0043 GMT. They had risen 1.3% in previous sessions. U.S. West Texas Intermediate crude futures fell 56 cents or 0.6% to $88.52 per barrel, reducing about half of the gains from the previous session.

Both benchmark oil contracts still saw a weekly increase, with Brent seeing a gain of over 3% and WTI seeing a rise of more than 4 percent.

Friday’s declines occurred as the index climbed to 110.57. This made oil more expensive for buyers who hold other currencies.

Analysts stated that the strong rebound of U.S. gross national product in the third-quarter reported on Thursday highlighted America’s resilience as a world-leading economy and oil consumer.

“From an oil market perspective, despite the high interest rate – that’s directly driver into your demand outlook,” Baden Moore, head commodities research at National Australia Bank (OTC):

He said that volatility in the market was likely to be on its side, given that global inventories remain low, European sanctions against Russian crude are due to take effect in December and Chinese demand is increasing.

The rising Brent price is fuelled by signs of a rise of refinery runs in China and Europe’s need for crude oil ahead of the embargo against Russia. Also, OPEC+ and its allies are preparing to cut supply.

“The market remains concerned about the impending deadlines for European purchase of Russian crude oil before sanctions kick in on December 5th,” ANZ Research analysts stated in a note.

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