US Dollar Hit a 10-Month Low against the Euro
Crude oil futures
WTI (West Texas Intermediate) crude oil (UCO) (USO) (SCO) futures contracts for August delivery fell 0.4% to $44.05 per barrel in electronic trade at 2:05 AM EST on June 28, 2017. Crude oil prices are near a ten-month low due to oversupply concerns. The rise in crude oil production from Libya also pressured crude oil prices. Libya’s crude oil production rose to 935,000 bpd (barrels per day) for the week ending June 23, 2017—compared to 885,000 bpd for the week ending June 16, 2017.
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US Dollar Index
The US Dollar Index fell 0.97% to 96.2 on June 27, 2017. The weak US dollar (UUP) supported crude oil prices on June 27, 2017.
The US dollar fell 0.2% to 96 in electronic trade at 2:05 AM EST on June 28, 2017. The US dollar is at a seven-month low. The US dollar has fallen almost 7% from its peak in January 2017. It’s at the lowest level in the last ten months against the euro.
The European Central Bank’s president stated that the central bank might adjust its interest rate and bond purchase program on the grounds of improving economic prospects in Europe.
In the US, the delayed vote on the health care bill weighed on the US dollar. Expectations of weak inflation in 2017 also weighed on the US dollar. President Trump’s inability to deliver tax subsidies and fiscal stimulus pressured the US dollar.
Crude oil and the US dollar are inversely related. A weak dollar makes crude oil more economical for crude oil importers. Expectations of a weak dollar in the short term could support oil prices in the short term.
Next, we’ll look at the API’s estimates for US crude oil inventories.