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Dollar supports oil’s monthly earnings

by Bunkerist
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While concerns over the world’s largest economy and the recovery of the oil consumer continue, oil, which is backed by the weak dollar, is on its way to recording monthly earnings, and prices rose on Friday.

Brent crude was up 31 cents, or 0.7%, at $43.25 a barrel by 0831 GMT. On Thursday, Brent closed 1.9% down after touching its lowest since July 10.

WTI crude gained 26 cents, or 0.6%, to $40.18 after dropping 3.3% in the previous session, also off lows not seen since July 10.

Brent continues his fourth monthly gains. WTI crude oil moving towards the third-month earnings, after the rises from the destruction in April when most parts of the world were subject to deadlocks.

The dollar extended its dramatic drop on Friday. The US gross domestic product, released on Thursday that has fallen by 32.9% annually, continuing its biggest monthly decline in the last decade, following the steepest decline in production since 1947.

Investors generally consider dollar-denominated commodities as safe havens when the dollar weakens, or vice versa.

Since oil has historically been viewed as a risk to inflation, global incentives and weak dollars will continue to support oil prices.

Increased coronavirus infections increased the risk of renewed lockdowns and the threat to the recovery of oil demand.

Unsatisfactory refining margins, low Chinese oil demand and high crude oil stocks continue to put pressure on oil prices.

A record decrease in production is recorded in Germany, Europe’s largest economy shrank by 10.1% in the last quarter.

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