Crude oil is traded in US dollars. The US currency is currently strong. This has implications for other currency areas.
Oil prices fell on Wednesday. The lowest levels since the end of July were recorded in the morning. At midday, a barrel (159 liters) of North Sea Brent for delivery in January cost $81.02. That was 58 cents less than the day before. The price of a barrel of US WTI for delivery in December fell 62 cents to $76.75.
The strong dollar put pressure on prices. Crude oil is traded in US currency. A higher dollar exchange rate makes the raw material more expensive in other currency areas, which dampens demand.
The weakness of the global economy is also weighing on prices. While the US economy appears to be weakening, China has been struggling with weakness for some time. The two countries are the largest energy consumers in the world.
Source: Stern
