Oil prices rise as the dollar weakens for the third consecutive day

Overview

Oil prices have risen for the third consecutive day, supported by signs of improved demand and considerations regarding the Federal Reserve's interest rate policies.

Price Increase

Brent crude has increased to $86 per barrel, while West Texas Intermediate (WTI) has exceeded $83 per barrel. This increase is driven by several key factors:

Factors Supporting the Rise

• Improved Fuel Consumption in the United States: Gasoline and jet fuel consumption has risen during the summer travel season, leading to increased demand for oil.
• Decrease in Crude Oil Inventories: Data showed a decrease in U.S. crude oil inventories, reflecting higher consumption and lower supply, which supported the price increase.

Economic Impacts

U.S. Inflation Slowdown

The United States saw a slowdown in inflation in June, reaching its lowest level since 2021. This data strengthened expectations that the Federal Reserve might begin lowering borrowing costs in the current quarter, leading to:

• Decline in the U.S. Dollar Index: The drop in the dollar makes oil, priced in dollars, cheaper for foreign buyers, boosting demand and raising prices.
• Expectations of Interest Rate Cuts: Potential interest rate cuts would support economic activity and increase fuel consumption.

Future Projections

With improved economic indicators and lower oil inventories, oil prices are expected to continue rising in the coming weeks. It will be important to monitor:

• Developments in Federal Reserve Policies.
• Fuel Demand Levels During the Summer Season.