Oil prices reached their highest levels in over a week on Friday as a weaker U.S. dollar had a positive impact on commodity prices. This rise came in the aftermath of the Federal Reserve’s latest economic and interest rate projections.
Price Action
- West Texas Intermediate crude for January (CL00, -0.10% CL.1, -0.10%) increased by 48 cents, or 0.7%, to $72.05 a barrel on the New York Mercantile Exchange.
- February Brent crude (BRN00, -0.10% BRNG24, -0.10%), the global benchmark, gained 49 cents, or 0.6%, reaching $77 a barrel on ICE Futures Europe.
- January gasoline (RBF24, +0.26%) rose by 0.7% to $2.13 a gallon.
- January heating oil (HOF24, +0.51%) saw an increase of 1.2% to $2.62 a gallon on Nymex.
- Natural gas for January delivery (NGF24, +1.34%) gained 1.5%, reaching $2.43 per million British thermal units.
Market Drivers
This week, oil prices experienced a rebound after the worst streak of losses since 2018. Experts in the commodity market attribute this move to short-covering and a weaker U.S. dollar.
Since the beginning of the week, the dollar has fallen by 1.7% against major currencies, as indicated by the ICE U.S. Dollar Index (DXY), a commonly used measure of the greenback’s performance. On Friday, the dollar showed some signs of recovery, with the index trading 0.3% higher at 102.22.
This decline in the dollar was largely influenced by the latest batch of official projections from the Fed, which revealed that the central bank plans to implement three interest-rate cuts in the coming year.