The cost of April futures on North sea Brent crude oil at London exchange ICE reached $35 per barrel. 1:24 GMT Brent was trading at $35,51, which is 7.8% higher than the previous close of trading.
Rising prices for U.S. Texas light sweet increased to 9.5%. At the close of trading of a barrel of WTI cost $32,75 per barrel. Thus, for day futures rose $2,87.
The jump in world oil prices occurred against the background of a strong weakening of the U.S. currency. As noted by Bloomberg, citing its own Dollar Spot Index, the dollar’s decline was the steepest since March 2009.
As explained by The Wall Street Journal, a weak dollar supports oil, which is traded in U.S. currency. Its weakening makes oil cheaper for foreign buyers.
“The jump in crude oil prices linked to the weaker dollar,” said Robert Yawger, senior Vice President energoforum at Mizuho Securities USA (quoted by Reuters). At the maximum of the American currency to Euro was falling 1.7% to $1,1105, the lowest level since October. In this case, by the close of trading the dollar has started to win back their losses.
Head of equity trading at RBC Global Asset Management Inc Ryan Larson, commenting on the growth of oil, said that the market is still in a precarious situation. “Today’s growth factors tomorrow may turn into the cause of the weakening,” noted the analyst.
The fall of the American currency occurred on the background of the publication of the index the index of purchasing managers (PMI) for the US service industries. In January, he was 53.2, the lowest level since October 2013. While preliminary indications were of 53.7, and economists polled by The Wall Street Journal had expected the index growth to 54.7.