The emboldened U.S. dollar pulled down West Texas Intermediate crude oil futures on Friday, as the world's reserve currency pushed to its top level in more than 14 days, according to Bloomberg.
Production by all 12 member nations of the Organization of the Petroleum Exporting Counties increased in April, according to the group's headquarters in the Austrian capital. But OPEC minimally changed its demand forecast.
"Commodities are taking a hit because the dollar is ripping," futures division director Bob Yawger with Mizuho Securities USA Inc. in New York told the news source on Friday. "The Dollar Index crossed 83, which is hurting all these markets."
At 10:20 a.m. on Friday, Brent crude oil futures dropped 2.42 percent, a $2.53 loss to $101.94 per barrel. At 10:24 a.m., WTI crude oil futures fell 2.66 percent, a $2.56 dive to $93.83 per barrel.
Reuters reports losses for the energy commodity also are correlated with strong and seemingly growing inventories and concerns about the outlook of China, host of the globe's second-largest economy and the world's second-largest consumer of crude oil.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
