Hoisting Oil Price:the latest string in the pulley system - US$

 

oil price and weak dollar

As oil rally continue to defy the negative sentiments surrounding the major economies, the lever system that hoists it got yet another boost from the weakening dollar.

The price of crude oil is at a 10-month-high, having suffered terribly during the first wave of the pandemic; it even forced the academics to rewrite the history, when the price went negative for the first time ever on April 20th.

The recovery has been fairly steady since October 2020, despite the outbreak of the Coronavirus across the world at varying rates. The success of vaccines, however, managed to lift up the mood of the investors and analysts that continue unabated.

The production cut by the OPEC+, for certain, boosted the price. In addition, the following factors helped too:

  • Significant inventory draw
  • The rise in rig count
  • Heavy demand in Asia
  • Onset of cold weather fronts in Europe and America
  • Relative calm in the Middle East

The latest boost from the weakening dollar keeps the price of crude oil in robust bull territory.

The markets, however, must be watching the new US administration and how they plan to tackle the environment impact at global level. Until then, nothing will stop the momentum of the oil rally.

 

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