Weak dollar, the ‘only support’ for oil prices - Analyst | Sunday Observer

Weak dollar, the ‘only support’ for oil prices - Analyst

6 September, 2020

Oil prices are likely to continue creeping up simply due to a weak dollar, an analyst said on Thursday.

“As far as fundamentals are concerned, there is really not much to move oil around either way, which is why we have seen it pretty range bound, but within that continuing to grind higher because of a weaker dollar,” said Vandana Hari, founder of Vanda Insights, an energy consultancy. “That’s been the only support, I would say.” Like most commodities traded internationally, oil is denominated in dollars, so a weaker greenback lends support to prices.

In March, a futures contract for US crude prices dropped over 100% and turned negative for the first time in history as demand collapsed due to the coronavirus pandemic.

There was a slight rebound in crude oil prices through May and June as economies reopened after lockdowns to contain the coronavirus. But oil demand has fallen in July and August in some countries such as India, while flatlining in others, she said.

On Thursday, international benchmark Brent crude oil futures were trading around $44.50 a barrel at 10:36 a.m. HK/SIN, while US West Texas Intermediate futures were around $41.65 a barrel. - CNBC