Economic news

Prices of oil drop because of growing dollar and US oil production

Prices of oil dropped today, pressured by a jump of US currency after a minimum of three years reached in the past week and a forecasted increase in US crude output.

US WTI futures lost 72 cents, going down to $61.07 per barrel from the previous settlement.

Brent futures moved lower by 60 cents to $64.65 for a barrel, compared to the last end of session.

Brent might stop somewhere between $63.92 and $64.41 per barrel, as seen from its wave pattern and a development analysis, Wang Tao, analyst from Reuters, said.

The fall is caused by growth of the dollar, which could bring down demand on crude because oil imports depending on the US currency become more costly for states using their own currencies, traders said.

The dollar index, showing the level of the dollar versus a basket of 6 main currencies, climbed for a second straight day on Wednesday, distancing further from the minimum of three years reached in the past week.

Another factor pushing down oil prices is booming US output, now standing at the second position in the world with over 10 mln barrels a day, just a little less than Russia and more than Saudi Arabia, the biggest exporter.

The next report on weekly US production by the EIA is expected to be published tomorrow, one day overdue because of the President’s Day, which was on Monday.

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