July 22, 2024

Oil is up: Drop in US crude inventories, US sanctions on Iran

LQDFX news blog: Oil is up: Drop in US crude inventories, US sanctions on Iran

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Brent oil is up 1.52 dollar a barrel ahead of a report indicating a fall in US crude inventories. Tighter supplies are also expected following US sanctions on Iran.

Above 74 dollars a barrel, oil climbed a 2-week peak. Crude oil futures inched up by 1.38 dollar. Traders are very cautious.

Washington re-imposed “snapback” sanctions following Trump’s decision to pull the States out of the 2015 Iran nuclear Deal (JCPOA). The concept behind the decision, according to the US President, was to curb Iran’s nuclear program. As Iran is OPEC’s third-largest producer and the world’s fifth-largest oil producer, analysts expect that oil prices will further increase.

European oil companies have started to cut back on Iranian purchases. However, less oil demand is attributed to concerns over US-China trade dispute.

Greenback’s fall this week supported oil, as a weaker dollar makes oil more in-expensive for buyers using other currencies. Dollar dipped on Tuesday on Trump’s unusual criticism of Fed’s interest hikes.


Forex Market – Oil is up; what about major currencies?

The Dollar index fall 0.1% against its major traded rivals following Trump’s comments on Fed’s decisions on interest hikes. Traders also focus on US-China trade talks later this week.

The Australian Dollar fall almost 0.5%, as Australia’s Prime Minister faced a second leadership ballot.

The New Zealand Dollar hit a 2-week high following strong retail sales data.

The Euro strengthened 0.2% against the greenback, close to a 2-weeks high and 3 cents rebound from last week’s 14-month lows.

The Sterling dropped 0.3% from 12-day amid traders’ concerns for no-deal Brexit. The pound fall 0.2% against the single currency as well. Dollar weakness following Donald Trump’s comments on FED’ s decision on interest rates also helped the pound earlier this week.

Spot Gold fell 0.2% from a one-week high, to $1,193.87 an ounce. Last week gold suffered its largest weekly loss since May 2017, hitting a 19-month low.

Sources: Reuters, CNN money, BBC

PLEASE NOTE The information above is not investment advice.