Brent Prices Remain Depressed Despite Geopolitical Problems
Brent crude oil remained depressed on Monday as a stronger dollar and decreased global demand weighed on prices.
The commodity traded at $102.10 at 8:00 GMT despite ongoing conflicts in the Middle East, Africa and Eastern Europe.
Geopolitical tension has taken a back seat in driving oil prices as investors are mostly confident that there is minimal risk of a significant supply interruption.
CNBC reported that fighting in Tripoli completely destroyed the airport over the weekend, but exports continued to ramp up as the nation’s oil ports reopened. Last week, Libyan output was up to 612,000 barrels per day, still a far cry from its 1.4 million bpd capacity, but a marked improvement nonetheless.
Despite instability across the globe, Brent prices have been struggling as investors see weaker demand out of both China and Europe, and the U.S. dollar continues to rally.
At the Jackson Hole summit last week, Federal Reserve Chair Janet Yellen struck a less dovish tone than expected, helping the dollar rise and in turn hurting commodities priced in dollars.
While Yellen didn’t provide any new insight into the bank’s plans to raise the interest rate, she did acknowledge worries that it could hurt the nation’s recovery if an accommodative policy is used for too long.
Moving forward investors will be keeping a close eye on new developments in geopolitical problems as any major escalation could have the potential to drive prices higher.
Economic data due out this week will also be on the radar as investors look for any indication of a demand increase.
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