Oil price recovers as dollar weakens against euro

Oil prices steadied above 48 dollars a barrel on Tuesday, recovering from earlier losses as the dollar weakened against the euro.

Brent crude oil futures rose 22 cents to 48.38 dollars a barrel.

U.S. West Texas Intermediate (WTI) crude futures rose 10 cents to 45.25 dollars a barrel.
The euro rose for a second day against the dollar after an 11-year low on Monday.

Prices were also supported after the Secretary-General of the Organization of the Petroleum Exporting Countries, Abdullah al-Badri, said oil prices may have bottomed out.

He warned of a jump of oil price to 200 dollars a barrel if investment in new supplies was too low.
Michael Hewson, chief market analyst at CMC Markets, said that the effects of the weakened dollar and the residual effect of Badri’s comments were temporary.

“I certainly don’t think it changes the fundamental dynamic of the direction of prices with regard to oil,” said Hewson.

“When you look at where Brent is and where it’s been, there’s a pretty solid floor at the moment around 47 dollars a barrel.”

Standard Chartered said OPEC’s decision to keep production high was beginning to impact other producers.
“Non-OPEC output is being hit hard, and we now expect the oil market to tip into supply deficit in H2,” the bank said.
Traders said there were other signs of a potential market pick-up.

“I’m not sure if prices have bottomed out, but I can see some signs for prices to rebound,” said Yusuke Seta, a commodity sales manager at Newedge Japan.

He was referring to a rise in Brent’s open interest in the past few weeks.

Brent’s open interest on the Intercontinental Exchange (ICE) hit 1.69 million lots in the week of Jan. 20, a record high since the data started in 2011.

The next data on supply will come later in the day from U.S. commercial crude stockpiles, which likely rose nearly 4 million barrels last week, a Media survey showed.

U.S. crude stockpiles posted the largest build in 14 years in the previous week.

Trading volumes are likely to be limited later on Tuesday as a snow storm is expected to disrupt transport in New York.

(Reuters/NAN)


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  • Hadiza Okafor

    Reading some articles on the same topic I have noticed that when the fuel prices go down, it’s all GEJ’s fault – him and his poor decision making – as if a country (maybe other than Saudi Arabia) had their word to say in such matters. However when the price goes back up, it’s got absolutely nothing to do with him. People get so indoctrinated sometimes.

  • JamesAdebayo

    I think the OPEC decision to keep the production flowing, especially given the weight of Saudi Arabia in their sayings and knowing their reluctance to give up market shares to other countries, has proven to be damaging for many other big oil producers around the world. This could definitely have been handled better by the OPEC. Fortunately for us, our President has already taken steps in diversifying our economy during his mandate and has pledged to implement more policy in that regards. We have, with great success, strengthened our agricultural output since the implementation fo the Transformation Agenda by GEJ.

  • FadeelahO

    People are alarmed when the oil prices fall or rise too much. The “oil curse” has always been there. Blaming it on the President is pure nonsense. The price of oil will always fluctuate.

  • Dayo

    People should stop being so obsessed with oil. For one, most of our oil money is diverted by corrupt people, and moreover the whole idea is to break free from oil dependency. Diversification, that is – exactly what GEJ has been advocating and implementing for the past four years (with the development of Agriculture, Manufacturing, Telecommunications, the Creative Economy, and so on).

  • Keem

    Gboomgba…….Explosive!
    You’ve just educated me. You deserve an award for speaking the faithful mind of a true believers. Remain blessed

  • Isyaku Bala

    Yes your comments are true but it is too early to judge the trump administration who believes in white supremacy

  • James Ojapa

    Very well written majeed dahiru