Oil pulls back from 6-week high on strong dollar

2021-09-20 12:05:33 GMT (Economies.com)
Oil pulls back from 6-week high on strong dollar

Oil prices fell on Monday, deepening losses for the third day and gave up a 6-week high on continued profit-taking, while fears over production delay in the Gulf of Mexico region eased, in addition to as the US dollar's rise against most currencies.

 

US crude fell 1.7% to $70.66 barrel, after opening at $71.89, and hit a high at $72.06, and Brent crude fell 1.75% to $74.12 a barrel, after opening at $75.44, and hit a high at $75.45.

 

The US crude lost 0.9% on Friday, and Brent fell 0.4%, after hitting a 6-week high.

 

Oil prices gained around 3.5% last week, the fourth straight weekly gain, thanks to hopes of strong demand in the US.

 

The dollar index rose 0.2% on Monday, the third profit in a row, marking month highs at 93.40 against a basket of major rivals.

 

The gains come amid increased investor interest on the greenback following increased bets on policy tightening in the US before the year ends. 

 

After 2 weeks since Hurricane Ida and the Tropical Storm Nicholas hit the Gulf of Mexico this week, US production is recovering near its normal levels.

 

Production rose by 25% during the last few days, with the region’s total production rising to 75%, with 0.25% of production suspended but expected to resume this week.

 

Gulf of Mexico encompasses 17% of the US total production, which was 11.5 million bpd before Hurricane Ida, and is currently around 11.1 million barrels per day.

 

Baker Hughes revealed on Friday that the US drilling and exploration rigs rose by 10 rigs to a total of 411, the highest level since the week ending April 17, 2020.

 

The increase in the US drilling activity boosted the US production by more than 47% since mid-2016 to a total of 13.1 million barrels per day in March 2020, and held recently around 11.5 million bpd due to the coronavirus pandemic, marking the US place as the world's largest oil producer.

 
 
 
  Symbol Last Change Chg.%
1.1606
0.0036
0.3139%
1.3751
0.0123
0.9053%
Tadawul
11773.36
25.09
0.21%
23.335
0.700
3.090%
82.022
0.902
1.112%
84.86
0.86
1.02%
1767.855
13.150
0.749%
 
 
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