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Crude Oil Extends the Decline in the Strong Dollar

Crude Oil prices fell further in Asia’s midday trade on November 15, as investors worried about a strengthening dollar amid signs of rising inflation and a recent increase of COVID-19 cases in Europe and China. The ICE January Brent futures contract was down 49 cents/b from its previous closing of $81.68/b at 10:12 a.m. Singapore time, while the NYMEX December light sweet crude contract was down 39 cents/b at $80.40/b.

Investor confidence has been rocked in recent days by signals of growing inflation in the United States, and bearish pressures continued to dominate sentiment in an event-light week of November 14. In the form of Strategic Petroleum Reserve releases, the Biden Administration has hinted at steps to combat rising Oil prices. The White House has been debating how to deal with rising inflation, with some officials suggesting tapping the strategic reserve or suspending US exports.

The latest inflation data could push forward the US Federal Reserve’s plans to tighten its loose monetary policy further with early rate hikes. According to the CME FedWatch Tool, most traders were now pricing in a rate hike as quickly as June 2022, compared to earlier predictions of a raise in November 2022. As a result, the US dollar has risen, with the US dollar index nearing highs not seen since July 2020.

The index was down 0.15 percent at 94.99 at 0212 GMT. Meanwhile, despite an increase in COVID-19 cases around the world, global mobility has slowed. China is still dealing with its newest epidemic of infections, while other European countries, including Germany, Austria, and the Netherlands, have recently experienced record caseloads. According to the most recent Google data, global mobility was 9.8% lower than pre-COVID levels in most of the world’s most significant Oil users.

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