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Oil Prices Fall on Rising Dollar

Oil Prices Fall on Rising Dollar
Oil Prices Fall on Rising Dollar

Oil prices fell on Friday as a collapse in bond prices led to gains in the US dollar and expectations grew that with oil prices back above pre-pandemic levels, more supply is likely to come back to the market.
US West Texas Intermediate crude futures dropped 36 cents, or 0.6%, to $63.17 a barrel, giving up all of Thursday’s gains, Reuters reported.
Brent crude futures for April fell 18 cents, or 0.3%, to $66.70 a barrel, following a 16 cent loss on Thursday. The April contract expired on Friday. The more active May contract fell 32 cents, or 0.5%, to $65.79.
A stronger greenback makes dollar priced oil more expensive for those buying crude in other currencies.
Despite the drop in prices on Friday, both Brent and WTI are on track for gains of about 20% this month, as markets have grappled with supply disruptions in the United States, while optimism has built for demand to improve with vaccine rollouts.
Investors are betting that next week’s meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, will result in more supply coming back to the market, given the recent jump in prices and expectations that demand will improve as pandemic lockdowns ease heading into the northern hemisphere summer.
There is about 4 million barrels per day of capacity still shut and it may take until March 5 for all of the shut capacity to resume though there is risk of delays, analysts at J.P. Morgan said in a note this week.
 

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