Oil Rises but Limited by Strong Dollar

Oil prices recovered from Trump singling out the OPEC’s influence on oil prices. Energy Secretary Perry said that the Administration would not be using the SPR to offset the disruption of Iranian crude. A strong dollar is keeping the black stuff from rising higher. The rate increase that has heavily anticipated by the market came to pass and boosted the dollar against all majors.


West Texas Intermediate graph

Global growth concerns rose after the Trump administration is taking a tough stance on Canada on its NAFTA negotiations and the US-China negotiations don’t have a date to restart talks. Energy demand is negatively impacted by a trade war scenario and for the moment the lower supply narrative as a result of the sanctions against Iran are keeping prices bid.


West Texas Intermediate graph

Saudi Arabia as the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC) will be under pressure to cover the shortfall. Saudi Aramco is said to be increasing output capacity by more than 500,000 daily barrels but the supply and demand of crude will continue to be sensitive to geopolitical pressure

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza