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.

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.

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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