While the West Texas Intermediate (WTI) for November lost 2.6% to 76.71 dollars, a minimum since the first session of the year in New York, on January 3 last.
For Andy Lipow of Lipow Oil Associates, “The price drop has two drivers. The first is the stronger dollar. The second is fears that high energy prices in Europe will lead to global demand destruction.”
In a month and a half, the Dollar Index, which measures the evolution of the greenback in relation to a basket of currencies, rose 10%, a variation of a rare magnitude in the foreign exchange market. A strong dollar makes the barrel more expensive for investors in other currencies.
For the analyst, a decrease in the European thirst for crude oil may spread to China, an important trading partner of the old continent. The US economy would also be affected, according to Lipow.
“The chaos in the foreign exchange market could continue to affect crude oil prices whatever OPEC+ does in the short term,” Oanda’s Edward Moya said in an analysis note.
Opec+ (OPEC and its allies) will meet on October 5 to set their production levels for November.
This alliance, however, produced 3.58 million barrels per day in August less than the 43.85 that it had promised to market, due to lack of sufficient capacity on the part of its members. Still, prices went down.
Source: Ambito
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