Crude oil (USO) (BNO) prices had a lower performance in the last five trading sessions between March 7, 2017, and March 14, 2017. Crude oil prices fell nearly 11.5% during this period. Rising global crude oil inventories and rising crude oil production in the US pressured crude oil prices (SCO) (OIIL) (DBO).
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Oil rig counts are also increasing. Rising oil rig counts help US oil producers increase their production. Read Why Oil Rigs Could Drag Oil Prices Even Lower to learn more.
After showing a huge fall in performance, crude oil prices recovered on March 15, 2017. Crude oil prices rose nearly 1.3% on the same day as the Fed’s decision. In the previous part, we discussed that the US Dollar Index (UUP) fell nearly 1% on Wednesday after the announcement of the Fed’s rate hike decision.
A stronger dollar always impacts crude oil importing countries by making crude oil more expensive. A stronger dollar generally pressures crude oil prices. As the dollar weakened on Wednesday, crude oil prices moved little higher. In the past five trading sessions, when crude oil prices showed a huge fall in performance, the correlation between the US Dollar Index and crude oil was at -25.5%.
In the next part of this series, we’ll analyze how gold prices reacted to the Fed’s rate hike decision.