• 5 minutes USGS Announces Largest Continuous Oil Assessment in Texas and New Mexico
  • 10 minutes Venezuela continues to sink in misery
  • 13 minutes U.S. Senate Advances Resolution To End Military Support For Saudis In Yemen
  • 16 minutes IEA Sees Global Oil Supply Tightening More Quickly In 2019
  • 8 mins Paris Is Burning Over Climate Change Taxes -- Is America Next?
  • 2 hours Rage Without Proof: Maduro Accuses U.S. Official Of Plotting Venezuela Invasion
  • 17 hours OPEC Cuts Deep to Save Cartel
  • 8 hours $867 billion farm bill passed
  • 5 hours Has Global Peak Diesel Arrived?
  • 14 hours Sleeping Hydrocarbon Giant
  • 10 hours How High Can Oil Prices Rise? (Part 2 of my previous thread)
  • 16 hours What will the future hold for nations dependent on high oil prices.
  • 16 hours Air-to-Fuels Energy and Cost Calculation
  • 18 hours And the War on LNG is Now On
  • 14 hours Could Tesla Buy GM?
  • 16 hours Global Economy-Bad Days Are coming
Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Is It Time To Take Profits?

Is It Time To Take Profits?

Like many of the higher-risk assets, energy-related markets posted a top at the end of April and started a decline the first few days in May. Without any major events last week, the markets were largely influenced by the strength and direction of the U.S. Dollar.

Commodities such as crude oil react to the movement of the U.S. Dollar because they are dollar-denominated. So when the dollar strengthens, the commodity becomes more expensive to foreign investors. Because of this, a rising dollar often leads to lower demand, which puts downside pressure on the commodity.

On May 3, the U.S. Dollar Index, which measures the U.S. Dollar’s value versus six currencies, fell to its lowest in over 15 months, led by the Japanese Yen’s surge, partly on skepticism about whether Japan policy-makers would intervene to slow its rise.

Thin trading conditions due to a Japanese holiday and position-squaring ahead of Friday’s U.S. Non-Farm Payrolls report helped trigger a short-covering rally by the dollar, helping to put pressure on crude oil prices.

The selling in the crude oil market could’ve been worse if not for speculative buyers taking advantage of wildfires in Canada that have forced several operations in the region to close and escalating Libyan violence that raised worries about immediate oil supplies.

The short-covering was so fierce that Brent oil’s premium over West Texas Intermediate briefly disappeared when the U.S. market…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin

Trending Discussions




Oilprice - The No. 1 Source for Oil & Energy News