Global oil prices have stabilized near their highest levels in four months amid a sharp decline in the US dollar and escalating geopolitical tensions. Traders are pricing in the risk of a possible military confrontation in the Middle East following recent White House statements regarding Iran. This is reported by Bloomberg, writes UNN.
Details
West Texas Intermediate (WTI) crude oil is trading within $63 per barrel, maintaining a significant gain from the previous session. The main reason for the price increase was the "collapse" of the dollar index to a four-year low. The fall of the US currency was provoked by Donald Trump's personal statement that he was "not concerned" about a weak dollar, as well as his unpredictable initiatives, including the idea of annexing Greenland, which stirred up European allies.
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A weak dollar traditionally increases the attractiveness of assets denominated in US currency, such as oil and gold. For many foreign buyers, raw materials have become cheaper in national currencies, which stimulated an active increase in demand on exchange platforms.
"Great Armada" and ultimatum for Tehran
The geopolitical premium in oil prices increased after Trump confirmed the dispatch of a powerful naval formation to the coast of Iran. The US president called this grouping a "great armada," which is intended to be an instrument of pressure on the Iranian leadership due to repression against protesters and threats of resuming the nuclear program.
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