Current Oil Prices and the Impact of the Dollar Value
The strengthening of the US dollar against other currencies plays a decisive role in the decline of oil prices. This week, the dollar gained value with the announcement of positive data on the US labor market and manufacturing sector. A strong dollar has a decreasing effect on demand by increasing the cost of oil for countries using foreign currency. The US dollar index increased by 0.14 percent in the morning hours and reached 104.035.
China is the world’s largest importer of crude oil, which has negatively impacted oil demand due to concerns about the country’s economic situation. According to the National Bureau of Statistics, the Chinese economy grew by 4.7 percent in the second quarter, below expectations. This has increased concerns about oil demand in the country, putting pressure on markets.
Additionally, market participants are concerned that renewed wildfires in Canada could impact oil production in regions with large oil reserves. The potential for these fires to spread to the US could jeopardize global oil supplies and push prices higher.
Technical analysis for Brent oil prices indicates that the range between $85.88 and $86.64 should be monitored as the resistance level, while the range between $83.46 and $82.70 should be monitored as the support zone.
