Oil increases its losses and Brent crude drops by 2.5%
Oil prices fell during trading on Friday in light of dollar’s rise against most major currencies, and renewed concern about global demand this year.
A technical committee consisting of OPEC and officials from independent producers in what is known as “OPEC +” alliance had revealed expectations of a slowdown in global oil demand during current year due to Coronavirus crisis, especially in light of speculation of a second wave.
This, and company “Baker Hughes” for oil services today announced number of drilling rigs for oil and natural gas in United States for this week.
In a separate context, dollar index rose (against a basket of major currencies) by 16:50 GMT by 0.6% to 93.3 points, and the highest level was recorded at 93.4 points and the lowest level was at 92.5 points.
In terms of trading, US Nymex crude futures for October delivery by 16:47 GMT fell 2.7% to $41.6 a barrel, and recorded highest price at $42.9 and lowest price at $41.4.
Brent crude futures for October delivery fell 2.5% to $43.7 a barrel, and the day’s highest price was at $ 45.08 and lowest price was at $43.5.
Oil prices decline after USD is rising in a limited range
USD rose against most of major currencies during trading on Friday, supported by economic data, to close to ending week’s trading on a positive note.
Government data showed that US existing home sales index jumped 24.7% to 5.86 million units in July, while PMI for manufacturing activity rose to 53.6 in August, highest level in 19 months from 50.9. on July.
It is noteworthy that Federal Reserve revealed in the minutes of last month’s meeting, severe concerns about negative impact of Coronavirus crisis on US economy.
Members of Central Bank called on Congress and federal government to inject more financial and monetary stimulus to support economy in facing repercussions of Corona pandemic.
Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.