Oil prices fell because of a collapse in bond prices leading to the strengthening of the US dollar according to an Economic Times report.
Crude oil prices in the US dropped by 36 cents for US West Texas Intermediate (WTI) CLc1 futures and for Brent Crude LCOc1 it dropped by 18 cents. National Australia Bank’s head of commodity research, said “Bonds are selling off reasonably aggressively and the US dollar has firmed this morning. That’s providing a bit of a headwind for crude oil this morning.” Both Brent and WTI will gain around 20% this week despite the price dropping. Many investors are hoping that a meeting next week with the Organisation of the Petroleum Exporting Countries (OPEC) and its allies called OPEC+ will result in a drop in fuel prices.
Shaw said. “The stakes at this time are particularly large (for OPEC+) insofar as oil prices have more than recovered to pre-pandemic levels, global inventories are continuing to trend down, and vaccine rollouts are accelerating.”