Oct 3 ( The Street Press) – Oil Prices Dip 1% in Asian Trading Due to a Stronger US Dollar, Higher US Bond Yields, and Mixed Supply Signals. They Fell to a Three-Week Low in the Previous Session.
In the latest update, Brent futures for December delivery dropped by 99 cents, which is approximately a 1.09% decrease, settling at $89.72 per barrel as of 0549 GMT. Meanwhile, U.S. West Texas Intermediate crude (WTI) declined by 78 cents, equivalent to a 0.88% decrease, reaching $88.04 per barrel.
Yesterday, the U.S. dollar index (.DXY) climbed to its highest level in 10 months against a range of major currencies. This was driven by the U.S. government’s avoidance of a partial shutdown and encouraging economic data that raised the possibility of the Federal Reserve maintaining higher interest rates for an extended period, potentially leading to a slowdown in economic growth.
When interest rates rise and the dollar strengthens, it can make oil more costly for those using other currencies, potentially reducing demand for oil.
Furthermore, Turkey’s energy minister’s recent announcement that operations on a pipeline from Iraq, suspended for approximately six months, will resume this week had an additional downward impact on oil prices.
When OPEC+ convenes its meeting on Wednesday, it’s anticipated that the organization, which includes OPEC, Russia, and allied nations, will maintain its current output levels. This decision is expected to keep the oil supply relatively constrained.
According to a Reuters survey, Saudi Arabia is poised to increase the official selling price of Arab Light crude to Asia for the fifth consecutive month in November.
