20 Sept 2021
Oil Prices Lower with Stronger USD and Rising U.S Oil Rig Count
The Index Today
On Monday, oil prices dropped further after previous week’s losses and the US dollar rising to a three week high. Even though a quarter of the U.S Gulf of Mexico remained offline after the hurricane, the U.S rig count went up.
Brent crude futures fell 0.8% to $74.73 a barrel. U.S West Texas Intermediate crude futures fell 0.9% to $71.31 a barrel on Friday.
Oil fell after the US dollar saw a three week rise as the U.S retail sales data release pushed hopes high. The report boosted expectations for the Fed reserve which plans to halt or decrease asset purchases later this year.
It is important to note here that a stronger dollar makes oil prices more expensive for other currencies to buy, driving down its demand. An increasing rig count will help keep oil prices in check. Last week, it has been reported that the rig count rose to 512, double the level from last year.
US. Gulf Mexico crude output remained shut by 23% or 422,078 barrels per day. This information was released by the Bureau of Safety and Environmental Enforcement.