In mid-April the U.S. dollar index was below 90. Today it is 96.6. < This is responsible for more than a $7/bbl decline in the price of WTI because oil trades in U.S. dollars.
Add this to one of your favorite websites and check it on a regular basis.
https://www.marketwatch.com/investing/index/dxy/charts
Very seldom is this mentioned by the "Talking Heads" which try to explain the daily ups and downs of the oil price, but it is a PRIMARY reason for oil price moves. A lot of hedge funds use oil futures contracts to hedge against a rising or falling dollar.
If you bring up an oil price chart for 2018 you will see that in April WTI was selling for $67-$69 per bbl, so if you adjust for the change in the value of a U.S. dollar oil (add $7/bbl), it is actually higher today in Euros.
Remember that oil trades in U.S. Dollars
Remember that oil trades in U.S. Dollars
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group