Crude Oil Price Update. Strengthening of Greenback and Advances by Libyan Rebels Causing Prices to Fall
Oil prices continued to fall on Monday, the 28th of March 2011. WTI for May delivery fell by 1.4 percent to settle at USD $ 103.98 a barrel, while Brent crude future fell by 0.7 percent to settle at USD $ 114.80 a barrel. The strengthening of the US dollar and Libyan rebel forces gaining momentum were the two factors which contributed to the price change.
Libyan rebel forces moved towards Muammar Qadhafi’s home town of Sirte. There were also reports that the rebels had gained control of the oil town of al-Brega, which raised speculations that oil production from Libya could soon restart. These sentiments gained a further boost when Mr. Ali Tarhoni, the rebel representative for economy, finance and oil, announced that they were looking forward to exporting oil within a week’s time. The US Treasury Department stated that the rebels would not face any sanctions on exporting oil. Thus, optimism amongst investors led to a fall in oil prices.
The US dollar strengthened against the Euro, after the German Chancellor, Angela Merkel, suffered losses in regional elections. It also strengthened against the Japanese Yen and the British Pound. The strengthening of the US dollar pressurized oil prices to decrease.