Oil prices fall as US dollar firms

Sean Reid
February 21, 2018

At 0710 GMT, April WTI crude oil is trading $62.07, up $0.52 or +0.84% and April Brent crude is at $65.16, up $0.32 or +0.49%.

However, "short term crude demand aspects and other fundamental indicators [are] still rather bearish-looking", analysts at consultancy JBC Energy wrote in a daily note Monday.

Worries over rising U.S. production have already dented oil prices this month and more evidence of rising output could place a firm cap this year.

According to Reuters, oil prices extended gains to hit their highest level in almost two weeks on Monday, buoyed as Asian shares joined a global recovery in equity markets and by worries over tensions in the Middle East. MCX Crude oil futures ended up 0.82% at Rs 3940 per barrel in last session.


Last week, major oil producer Saudi Arabia reaffirmed its alliance with OPEC and non-OPEC producers, including Russian Federation, in an attempt to reduce about 2 percent in inventories worldwide.

Global oil demand for 2018 is estimated to grow 1.6 million barrels per day due to an "encouraging environment", Barkindo added.

In the commodity markets, the gold depreciated for third consecutive session after the United States dollar recovered from its three-year low last week.

WTI has gained more than 8 per cent since the end of November, when the Organisation of Petroleum Exporting Countries and its allies agreed to extend an output-curb deal until the end of this year.


So far this year North American gold investors have the led the charge with funds adding 21.5 tonnes worth $940m during the month or three-quarters of the global total. Last week, the number of the operating oil extraction platforms in the United States increased for the fourth week in a row to 798, indicating that U.S. production, which has already reached a record 10.27 million barrels per day, may increase further.

We expect oil prices to remain choppy this week and the dollar will likely provide near-term triggers.

The American Petroleum Institute (API) is set to state its forecast regarding the USA crude supply on Wednesday. Europe's main indexes were fairly stable on Tuesday but Asian markets closed broadly lower, with the Nikkei 225 closing down 1 percent, South Korea's Kospi falling 1.13 percent and the Shanghai Composite slumping 0.46 percent.


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