Oil prices strong dollar dynamics began the week with a noticeable decrease in oil prices as the U.S. dollar strengthened, influencing the global commodities market. On Monday, Brent crude futures were reported at $85.21 a barrel and U.S. West Texas Intermediate crude at $80.71 a barrel, with the rising dollar making oil less attractive to international buyers due to currency exchange rates.
The robust dollar, supported by positive PMI data and anticipation of the French elections, has significantly impacted oil markets. Despite these challenges, geopolitical tensions and strategic OPEC+ supply cuts provided some support. Last week, oil prices strong dollar interaction led to a 3% rise in oil prices, fueled by increased demand for oil products in the U.S. and rigorous supply management by OPEC+.
Moreover, geopolitical concerns, including the ongoing Gaza crisis and intensified Ukrainian drone attacks on Russian refineries, continue to support oil market sentiments. In the U.S., there was a notable decrease in crude inventories while demand for gasoline and jet fuel surged, returning to levels seen in 2019.
Additionally, the U.S. reported a reduction in the number of active oil rigs, hitting its lowest point since January 2022, which might suggest a tightening in domestic oil supply. The interplay of these varied factors — U.S. economic strength, geopolitical risks, and OPEC+ decisions — is shaping the global oil market’s trajectory, with market watchers keenly observing these developments for signs of future price directions.
