BAKU, Azerbaijan, October 12. Oil prices will stay strong for now and will continue to put pressure on net importers, especially European Nations ahead of the winter season, Sam Barden, Director of SBI Markets, an international commodity trading and advisory company, told Trend.
He pointed out that this will put further pressure on already struggling Europe.
“The USD has been aggressively raising interest rates which is strengthening the USD, and putting pressure on all other currencies to follow their lead, or devalue. A stronger USD would normally mean weaker oil and gold,” said Barden.
The expert noted that the latest decision by OPEC+ to cut oil production by 2 million barrels per day (bpd) starting in November is designed to blunt the effects of the stronger dollar.
“These moves are all about the USD, not oil. Saudi Russia, China, all want to move away on the reliance of the USD, and we are seeing the slow decline of the USD as the world reserve currency in place of a basket of currencies. This is the transition from a unipolar world to a multipolar world playing out in real time.
Oil prices will depend on the USD rate rise cycle. If USD keeps raising rates, and OPEC + don’t continue cuts, oil price will soften. If rates don’t rise any more, which is unlikely, then oil price will stay firm. This is an Oil Price/USD death roll we are in,” Barden added.
---
Follow the author on Twitter: @Lyaman_Zeyn