Crude oil dips on strong dollar and oversupply concerns

December 15, 2021 12:55 PM AEDT | By Arpit Verma

Crude oil dips on strong dollar and oversupply concerns — Image source: © Batareykin | Megapixl.com

Rising US dollar and COVID-19 cases

The US dollar hovered to nearly one-week highs on Tuesday, prompted by the producer price data.

The prices of crude oil were also weighted after the World Health Organization stated that the Omicron variant of coronavirus is spreading at an extraordinary rate, prompting the market to inch lower.

Governments across the globe are trying hard to put restrictions to curb the spread of the Omicron variant.

IEA squeezed the crude oil demand forecast for 2021 and 2022 by 100,000bpd, primarily due to lower jet fuel utilisation amid ongoing travel restrictions.

Oil rig

Source: © Tebnad | Megapixl.com

On the flipside, OPEC increased its world oil demand forecast for the initial quarter of 2022, on Monday stating that the impact of the Omicron variant would be mild.

Bottom Line

Crude oil prices eased on Tuesday on rising concerns of Omicron variant of coronavirus and rising US dollar that makes oil more expensive for other currency holders.

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