Prior to the European Union’s (EU) December implementation date for a complete ban on Russian oil, Brent crude prices on Monday fell to approximately $95 per barrel as the US currency strengthened.
The market considers a higher US currency to indicate that the demand for crude oil would decline. Members of the EU recently signaled that the economic bloc might begin importing crude oil from Russia as a result of Moscow’s ongoing annexation of Ukrainian land.
Crude dealers also stated that a stronger currency and investors’ heightened apprehension about a potential reopening of China were supporting the price decline from daily highs of $97 per barrel.
After Governor Christopher Waller stated that the Federal Reserve was not weakening its fight against inflation, the U.S. dollar stabilized amid dwindling expectations of a less aggressive interest rate rise.
Similar to this, China’s National Health Commission recently relaxed certain coronavirus-related restrictions on the biggest oil import in the world, but an increase in coronavirus cases over the weekend stalled plans for an immediate and thorough reopening.
After the Organization of Petroleum Exporting Countries (OPEC) and its allies (OPEC+) agreed to cut production by 2 million barrels per day in November, the prospect of even tighter supply continued to support prices. READ: Market Recovers from Weak CPI as US Dollar
Trading data shows that WTI crude futures settled around $88 per barrel, a decline from their daily highs of $89.9 per barrel. The European Union ban on Russian oil is set to take effect in December. # Brent Drops to $95 as US Dollar Rebounds
