Weak Fundamentals Weigh on Oil Price

In electronic trade on Monday, oil futures fell further, adding to heavy losses suffered at the end of the previous week. Rising U.S. dollar and negative sentiment are cited as the most important reasons for the crude oil price slump.

Benchmark U.S. crude oil for August delivery lost 45 cents, or 0.5%, to $93.24 a barrel during Asian trading hours. This comes after loses of 1.5% last Friday. As of Thursday, previous front-month contract plunged 2.9% on the New York Mercantile Exchange.

August futures for London-traded Brent crude gave up 52 cents, or 0.5%, to $100.39 a barrel.

The recent losses for crude futures has come amid strong gains for the dollar, which extended its advance Monday as the ICE dollar index rose to 82.625 from late Friday’s 82.302.

A strong dollar weighs on oil and other commodities due to the fact they are all priced in U.S. dollars. After U.S. Federal Reserve Chairman Ben Bernanke signaled the end of the financial stimulus program, investors demonstrate renewed interest in the US Dollar.

Oil’s recent tendency to rise and fall with U.S. stocks seems to have ended, and even correlation with the dollar is weaker than before.

However, now market participants recognize that weak fundamentals matter more.

You may like the following related posts
Oil Price Fall Reflect on UAE Job Market 2015 salary projections for the United Arab Emirates had to be recently revised and readjusted. As a result, salary hikes in the country are now pre...
Oil Prices Make a Comeback; Now Buy Property in Dubai Crude-oil futures rallied well above $50 a barrel to settle at their highest levels of 2015 on Tuesday. Some analysts believe that oil prices bottomed...
Low oil prices is an opportunity for GCC economies to reinvent themselves Dramatic drop in oil prices is a game changer for the macro outlook for 2015 ‘Too low’ oil prices adds to the picture of rising global instab...
Oil Plunge Drove GCC Stock Markets Further South On Tuesday, Gulf stocks fell for the eight day in the longest losing streak since 2011, with Dubai’s and Saudi stock markets closing at their lowest...
UAE Most Attractive for Oil & Gas Contractors The United Arab Emirates has become a central hub of the oil and gas industry in the region, according to a new study. Although the country produces m...
North American, European Oil and Petrochemical Companies Show Keen Interest in J... The participation of Jebel Ali Free Zone (Jafza), the flagship free zone business of Dubai, in Abu Dhabi International Petroleum Exhibition (ADIPEC), ...