Falling demand, rising dollar drive down oil investments
Crude oil prices posted decreases on the commodities market today, amid a strengthening dollar and sinking global demand. Oil investments are in uncertain territory at the moment, as investors and economists await the results of a follow up meeting between the leaders of Group 20 concerning the full details of Europe’s debt crisis resolution plans.
The U.S. dollar reported significantly improved positions, edging to its highest levels in more than three months, as the yen tumbled after Japan intervened in the currency market to halt the soaring value of the yen. The greenback is now more than 1.5% over the standard basket of currencies. Crude oil futures and oil investments tend to falter then the dollar’s standings improve, as the commodity oil becomes too expensive for foreign traders. If the greenback’s rise persists, the commodities market will remain on a downward trajectory.
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Despite the fact that both Brent and West Texas Intermediate crude oil prices soared late last week on the strength of Europe’s debt deal, the oil commodity futures dipped once the first round of euphoria over the struggling region settled. Investors expressed their concern over the longevity and effectiveness of Europe’s plan of recapitalizing its banks and expanding its rescue fund to one trillion euros. Oil investments and the overall state of crude oil on the commodity index will rely heavily on whether trader optimism will persist.
Brent crude oil prices for delivery in December lost 91 cents in London to settle at $109 per barrel, while WTI crude oil futures lost $1.50 and settled at $92.27 per barrel on the New York Mercantile Exchange. Even though global economic signs are weakened, crude oil has managed to maintain at fairly high levels so far. Despite the fact that both Brent and WTI commodity oils have displayed trouble in holding over points of resistance on the commodities market, futures are still high compared to the dismal value crude oil assumed less than a month ago.