Oil resists dollar pressure, holds near highs
Oil prices fell on Monday, pressured by a strong dollar, but remained at their highest since mid-October as cold weather spurred buying while further support came from expectations of tighter sanctions on Iranian and Russian oil exports.
Brent crude futures fell 33 cents, or 0.4%, to $76.18 a barrel by 0950 GMT, their highest since Oct. 14.
U.S. West Texas Intermediate crude was down 35 cents, or 0.5%, at $73.61, also their highest since Oct. 14.
Oil had previously posted five sessions of gains, boosted by hopes of rising demand after a cold snap in the Northern Hemisphere and more fiscal stimulus to revitalize China’s faltering economy.
Brent crude was supported by colder-than-usual weather in northwestern Europe and the United States, rising natural gas prices and higher refining profit margins, said SEB analyst Bjarne Schieldrop.
However, the dollar’s strength is also a concern for investors, Phillip Nova senior market analyst Priyanka Sachdeva wrote in a report on Monday.
The dollar held near a two-year high on Monday, making it more expensive to buy dollar-priced commodities such as oil.
Investors are also looking to economic news for further clues on energy consumption and the U.S. Federal Reserve’s interest rate outlook. Minutes from the Fed’s last meeting are due on Wednesday and December’s payrolls report is due on Friday.
Meanwhile, Saudi Aramco (TADAWUL:2222), the world’s largest oil exporter, raised its February crude prices for buyers in Asia, the first increase in three months. Such price increases typically indicate stronger demand expectations.
Source: Investing.com
