Global prices for crude climbed to a nine-week high as the US dollar headed for its largest weekly fall in over a year, turning commodities into a more affordable purchase for holders of other currencies.
Brent crude futures increased by 1.93% to $86.1 per barrel – its highest level since October 25, 2021. Meanwhile, West Texas Intermediate (WTI) crude for February delivery rose by 2.2% to $83.95 per barrel, leading the US benchmark to post a 6.2% weekly gain – its fourth weekly rise in a row.
The US dollar index was 0.1% higher at 94.931, but finished the week down by about 0.9%, representing its worst weekly showing in eight months.
In addition to the weak dollar, oil markets have also been taking comfort from a boost in demand optimism, as early signs that Omicron cases are leveling off in US cities where the new variant first emerged suggest the US is approaching its infection peak.
European Union countries, have “started to perceive Covid as an endemic,” which implies they are “learning to live with Covid rather than impose sporadic lockdowns,” according to the chief financial officer at Velandera Energy Partners, Manish Raj, as quoted by MarketWatch.
Global crude prices have also been affected by the weekly report by the US Energy Information Administration showing that US commercial crude oil stocks declined by 4.55 million barrels to 413.3 million barrels in the week to January 7.
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