Crude Oil Prices Rise on Weaker Dollar
Published By : 14 Apr 2015 | Published By : QYRESEARCH
The prices of crude oil on Tuesday rose owing to a weak dollar as well as on the hopes of a looming fall in oil production in the United States.
The dollar fell against other key currencies owing to weaker than expected retail sales data in the US. Crude oil is priced in dollars is rendered more affordable to those purchasing through foreign currencies when the dollar is weak.
Crude oil prices also got a boost from a forecast by U.S. Energy Information Administration which was released on Monday. The forecast stated that in May the overall production of crude oil from seven major shale regions in the United States will drop by 57,000 barrels per day from April.
However, analysts have warned that this decline will not be sufficient to offset the oil glut across the globe. The value of crude oil has become half since summer last owing to meagre demand and rising supply. But this year, prices have been somewhat steady on the expectations of reduced US production. Companies have reacted to the fall in prices by increasing spending cuts.
Sweet, light crude oil to be delivered in May recently went up 72 cents, which is 1.4 per cent, to reach a value of US$52.63 per barrel on the New York Mercantile Exchange. Brent, which is the global benchmark, was up 13 cents, or 0.2 per cent, to reach US$58.03 per barrel on the ICE Futures Europe exchange.
The deceleration in the output of US oil is larger than the current market price, according to an analyst at Standard Chartered.