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OIL HOLDS GAINS AS INCREASING GEOPOLITICAL TENSIONS OFFSET US DOLLAR STRENGTH

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  • WTI trades back above $85 after whipsawing around it this week.
  • Oil price rises near 1% despite EIA calls for a negative outlook on Oil demand.
  • The US Dollar Index surges close to 106.00 and sets forth a fresh five-month high.

Oil prices are jumping higher again on Friday after the small 0.75% decline from Thursday. The move comes as commodities are soaring again fueled by geopolitical tensions and despite the fact that the US Dollar is stretching higher for a fourth straight day in a row this week. Meanwhile, the International Energy Agency (IEA) has cut its Oil demand forecast for this year and the next one, anticipating slower growth in 2025, due to a lacklustre economic outlook and the increasing market share of electric vehicles in the global car market

The US Dollar meanwhile is printing a staggering 1.8% rally in the US Dollar Index (DXY) after markets are increasingly expecting a bigger interest-rate differential between the Federal Reserve (Fed) and other central banks. This rate differential is separating the countries (and ergo the local currency) where central banks are in dire need to cut against countries from those countries where cuts are currently not needed. Robust US economic data points to the US as the leader of the countries where rate cuts under current conditions are not needed at all. 

Crude Oil (WTI) trades at $85.63 and Brent Crude at $90.19 at the time of writing.


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