ALBAWABA – The US dollar dropped while Oil prices rose on Monday after the Organization of Petroleum Exporting Countries and its allies (OPEC+) announced over the weekend that they will be looking into further oil cuts to bolster oil prices.
The United States (US) dollar slipped against all of its Group-of-10 peers, with Bloomberg’s dollar index down 0.21 percent, at 103.6980 by midday Monday, Amman time.
Oil prices, on the other hand, rose 0.7 percent on Monday, having fallen 20 percent since late September, news agencies reported.
After OPEC+’s announcement, Brent crude futures climbed $0.57 cents to $81.18 a barrel by 0400 GMT, according to Reuters, and West Texas Intermediate crude rose $0.51 at $76.40 a barrel.
While the front-month December contract expires Monday, the more active January futures also gained 0.7 percent, up $0.55, at $76.59 a barrel.
Oil prices rise on OPEC+ mulling new cuts, US dollar drops - Shutterstock
Despite the slide Saturday through Sunday, oil prices are building on previous gains from Friday’s rally, when OPEC+ announced they will be discussing further cuts in their upcoming meeting next week.
The oil market seems to have stabilized despite OPEC+’s cuts, which started in late 2022, and the additional voluntary cuts by Russia and Saudi Arabia.
Reuters reported oil markets have entered a contango state last week, for both Brent and WTI crudes, in which prompt prices are lower than future prices, signalling sufficient supply.
The US dollar is heading for its lowest close since August, which has boosted oil prices, according to Bloomberg. However, despite the boost crude got from a weaker dollar and anticipations of further cuts, demand concerns still persist, capping any rallies in oil prices, with both US and China demand prospects not looking so good.
Meanwhile, investors are also eyeing disruption in Russian crude oil trade after Washington imposed sanctions on three ships that have sent Sokol crude to India, Reuters reported
IEA slams ‘unneeded’ crude, gas field investments as oil prices swing on supply-demand concernsAlso, on Friday, Moscow lifted a ban on gasoline exports which could add to global supplies of the motor fuel. This comes after Russia scrapped most restrictions on exports of diesel last month.
