Increases to the world's reserve currency on Thursday against the shared currency of the European Union helped pull down the price of crude oil futures, according to Bloomberg.
Drivers of the dollar's strong performance include president Mario Draghi with the European Central Bank stating economic risks are very much in play as a consequence of the ECB slashing interest rates to their record lows.
Crude oil futures immediately dropped as the emboldened U.S. dollar touched its highest value in four weeks against the 17-nation monetary unit. But all was not lost for the energy commodity as crude prices gained in response to the U.S. Energy Department indicating in a report that inventories last week dropped by 4.27 million barrels. The reduction, the largest since the last month of last year, brings the stockpiles to 382.9 million barrels.
"The dollar is the only place to be," co-portfolio manager Marshall Berol with the Encompass Fund in San Francisco told Bloomberg. "The ECB is trying to stimulate the economy, and there are a lot of doubts about their ability to turn things around. The dollar is strong while just about every other market is weak."
At 3:02 p.m. on Thursday, crude oil futures gained 0.64 percent, a 64 cent lift to $100.41 per barrel.
Thus far this year, crude oil futures have lost 12 percent of their value. That the energy commodity has returned to the milestone price of $100 per barrel is a notable accomplishment given the losses as of late.
One strategist said the rate reduction applied by the ECB is likely to ultimately be beneficial to the price of the energy commodity.
"We're keying off the dollar," chief market strategist Bill O'Grady with Confluence Investment Management in St. Louis told the news service. "The ECB interest-rate cut should be good for oil, but its impact on the dollar is overwhelming any positive impact it will have on the economy."
But the energy commodity's fluctuations on Thursday were attributable to two factors, The Wall Street Journal reports.
Gains were linked with the sharp drop in supplies reported by the federal agency while losses correlated with the emboldened U.S. dollar.
Increases to the energy commodity also were due to the ongoing labor strike in Norway, Reuters reports.
Oil companies in the European nation issued calls for a lockout as part of a strategy to end the labor dispute orchestrated by offshore oil and gas workers. There stands a chance that the government also might become involved and intervene in order to iron out the differences and settle the labor dispute.
The country's labor ministry did not commit to intervening but it did note that a lockout is well within the realm of what is legally permissible.
Gains to the energy commodity on Thursday also are traced to the globe's second largest consumer of oil.
China, also the owner of the globe's second largest economic system, slashed interest rates as part of a strategy to enhance growth. The nation has seen hiccups with development as of late.
"You are getting a very strong 'sell the fact' move off these global rate moves this morning," hedge fund sales and energy markets managing director Mike Guido with Macquarie in New York told Reuters.
The slippage in inventories in the U.S. brings the supplies to an amount that is 6.8 percent more than numbers from 12 months ago, according to The Associated Press.
The U.S. is the globe's biggest consumer of oil and the nation's economy is the globe's largest.
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