The price of oil has fallen as a stronger dollar and technical weaknesses overshadowed increasing geopolitical risks.
The price of West Texas Intermediate (WTI) remained above $81 on June 25 (7:15 pm Bulgarian time), while the Black Sea oil stayed just below $84.5, after reaching its highest level since the end of April on Monday. The dollar rebound made commodities less attractive when valued in that currency, and futures on the Brent crude approached overbought territory.
However, crude oil prices maintained their monthly gains against the backdrop of global turmoil. Furthermore, Houthi rebels intensified attacks on ships near Yemen, and Russia accused the US and Ukraine of a missile strike on Crimea, threatening retaliatory measures.
The spread for immediate delivery of WTI has weakened recently, dropping from $1.15 last week to 76 cents in the opposite direction. The implicit volatility of Brent crude has slightly increased due to geopolitical risks, including the upcoming elections in Iran, but remains close to a six-year low.
Read more:
BRICS Nations: Saudi Arabia to completely switch oil trade from US dollar to Chinese yuan
JPMorgan Chase & Co. analysts forecast that the average price of Brent crude in the third quarter will be $84 per barrel, and it will reach $90 in August or September, due to expected global demand outpacing supply. Macquarie analysts raised their third-quarter forecast for Brent from $83 to $86 per barrel, anticipating increased demand.
This week, traders are carefully monitoring inflation and other economic indicators to gauge future monetary policy directions.
