WTI closes with a plus of over 2%, weak dollar spurs buying

Crude oil futures closed higher Monday (July 25) on a weaker dollar and a rebound in U.S. stocks.

  • WTI crude futures were up $2, or 2.1%, at $96.70 a barrel.
  • BRENT crude futures were up $1.95, or 1.9%, at $105.15 a barrel.

Oil markets are supported by a recovery of U.S. equity markets, including the depreciation of the dollar. The dollar index against the six major currencies in a basket of currencies fell 0.23% to 106.4840.

A weakening dollar benefits the oil contract because the dollar is cheaper for investors holding other currencies.

A commodity analyst at ING said the market was also driven by forecasts that Russian oil supply is likely to decline in the coming months. This is because many countries are planning to cap the price of Russian oil to prevent Russia from using oil revenues to support the war in Ukraine. Russia, on the other hand, threatens by no longer supplying oil to countries that limit the price of Russian oil.

In addition, oil markets were pressured by fears that the U.S. Federal Reserve will raise interest rates further at its July 26-27 meeting. The CME Group’s FedWatch tool now indicates that investors have a 77.5% expectation that the Fed will raise rates by 0.75% at that meeting and only a 22.5% expectation that the Fed will raise rates by 1.00%.

The Spot Market is Open

Tuesday, July 26, 2022

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
11.30

98.11

+1.41

+1.46%

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