The crude oil depreciated during Asian trade amid a stabilization of the US dollar and expectations for a continued increase in US production. The futures on US light crude oil with delivery in April fell by 0.78% to 61.31 USD per barrel, while Brent variety erased 0.58% to 64.87 USD per barrel.
According to the analysts, Wednesday’s price drop is due to a US dollar, which makes commodities denominated in US dollars expensive for countries using other currencies.
The pressure on prices continues to be driven by rising US production, as the country became the second-largest producer in the world, with more than 10 million barrels per day. Currently only Russia produces more. The next up-to-date weekly US oil production figures are expected to be published by the Energy Information Administration (EIA) on Thursday after a one-day delay due to the national holiday on Monday. The data will include crude oil stocks for the week until February 16, which are expected to grow by 1.3 million barrels.
Regardless of the growing US production, the overall oil markets remain well supported due to a healthy increase in demand and supply reduction by the Organization of Petroleum Exporting Countries (OPEC).
Because of the strengthening of the dollar, gold also depreciated, reaching a one-week low. The futures on precious metal with delivery in April fell by 0.16% to 1,329.10 USD per barrel. The increasing yields on 10-year US bonds to nearly 4-year high makes gold less attractive to investors. The silver, copper and platinum also reported declines in their prices by 0.35%, 0.39% and 0.38% respectively.
The dollar index, which measures the USD performance against a basket of six major currencies, is rising for the second consecutive day.