Oil Tumbles To $51 Handle As Dollar Spikes Into Green For 2019

At the same time, the dollar strength is weighing on commodities, most notably, oil which has plunged to a $51 handle as fears about the health of the global economy triggered further weakness following the worst week of the year last week...

 

As Bloomberg notes, West Texas Intermediate has reversed course after the best January on record as a lack of progress on the trade war and growth warnings from Europe, Asia and elsewhere depressed the demand outlook. In more bearish news, American drillers put seven additional oil rigs to work last week, bolstering concern that record U.S. production will undermine efforts by the Organization of Petroleum Exporting Countries and its allies to curb a global glut.

“We see prices at the moment at their fair value,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “There are a number of supporting factors as well as negative factors which balance each other out and keep the market in check.”

However, fears are intensifying that a US-China trade deal won’t be reached, which could spur a tit-for-tat escalation that would make an already shaky global growth outlook even worse.

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