Oil traders see demand possibly picking up and supply risks increasing due to geopolitical woes.
The US Dollar Index trades above 104.00 though is a touch softer.
Oil prices are jumping higher on Monday after finding some technical support on the pivotal $80.63 level. Prices could be set to rise further due to both supply and demand factors. On the supply side, Russia faces issues from both sanctions and drone attacks from Ukraine on Russian refineries and storage facilities. On the demand side, the projection that the US Federal Reserve will cut three times this year, coupled with a decline in borrowing costs in Europe as well, could spur the global economy and thus demand for Oil.
The US Dollar, meanwhile, is retreating a touch from its last week’s rally. Although the Fed clearly communicated they will be cutting three times this year, markets appear not to be buying into the argumentation. This week, the Fed’s preferred inflation gauge – The Personal Consumption Expenditure (PCE) Price Index – is set to be released on Friday, and another pickup in inflation could mean mayhem in markets.
Crude Oil (WTI) trades at $81.04 per barrel, and Brent Oil trades at $85.29 per barrel at the time of writing.
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