NEW YORK (Pakistan Point News / Sputnik - 19th July, 2022) Crude prices regained the $100-per-barrel mark on Monday as the dollar tumbled from two-decade highs, making oil contracts priced in the US Currency cheaper for those using other forms of money.
A technical rebound also helped key crude benchmarks - the New York-traded West Texas Intermediate (WTI) and London-based Brent - return to triple-digit pricing after falling to a near five-month low last week on fears of a significant interest rate hike for July by the Federal Reserve.
WTI settled up $5.01, or 5.1%, at $102.60 per barrel. The US crude benchmark lost almost 7% last week, after plumbing to a February 25 low of $90.58 on Thursday.
Brent settled up $5.11, or 5.1%, to $106.27 a barrel. The global crude benchmark slid almost 6% last week, after a near five-month low of $95.42 on Thursday.
The Federal Reserve went into its traditional "blackout" period for comments ahead of the July 27 decision on rates, allowing crude futures to trade more on supply-demand fundamentals than rate hike concerns.
An unusually light week for US economic data also left market flows to the discretion of traders.
"Crude prices are back where they belong, over the $100 a barrel level," Ed Moya, analyst at online trading platform OANDA, said. "Boosting oil was also a weaker dollar that stemmed from a broad rebound for risky assets. The short-term crude demand outlook should stabilize here as the US consumer is still spending and as airlines still see demand despite higher prices."
The Dollar Index, which pits the US currency against six other major currencies, witnessed its sharpest one-day tumble since mid-June. The dollar repeatedly hit two-decade highs over the past fortnight, dealing a severe blow to demand from oil buyers using currencies other than the greenback.