Strong Dollar Weighs On Brent
Brent crude oil started the week off on a low after the dollar gained momentum last week. Brent traded at $106.20 at 5:35 GMT on Monday morning after losing almost $3.00 per barrel last week.
A supply outage in Libya took a back seat as the US dollar soared and inventory data showed that US crude stockpiles had risen significantly. Also, CNBC reported that supplies of North Sea crude are forecast to climb to an annual high in November as North Sea oil fields return from maintenance. The supply increases offset a lack of production in Libya, where labor protests have cut the nation's exports to less than half of their normal capacity.
A strong US dollar also contributed to Brent's fall as the nation gets back on track after weeks of political and social uncertainty. The US government shut down had many worried about the US' recovery, but data from the nation has shown that the closure didn't do any significant damage.
Data showed that the US' manufacturing sector grew at its fastest pace in more than two years in October. The news helped the dollar climb to a new monthly high and in turn made Brent more expensive for holders of other currencies. Compared to a basket of six major currencies, the dollar was up 0.7 percent, the highest it has been since the middle of September.
Moving forward, investors will be closely focused on US data as the Federal Reserve's taper takes over the markets once again. Any indication that the bank is closer to pulling back on its easy money stimulus spending plan will be immediately priced in.
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