The price of oil rose by more than 2% yesterday. It reached the highest level in 12 months. That happened after their main producer showed that they limit the production in line with their commitment so far.
The United States and the global benchmark is stronger because of the optimism about more stimulus to come. The American economy adds the market bullish from the stock cut. Furthermore, the oil commodity shows some movements.
It could be started from the Brent crude oil. That commodity is up for $ 1.22 or 2.2%. So, that becomes $57.57 per barrel. That is happened as the third-day rise in a row and touching $58.05. It is the highest level counted from January last year.
OPEC Production Triggers the Rally
Based on the data from the market, the United States oil Increases by about 2.26% or became $54.76 per barrel. That was noted after reached its highest session of $ 55.26 in a year. The rally now happens in the market.
That was triggered by the OPEC production which is less than what market participants are expected. The crude oil produced by this organization increased for the seventh month in January, but the increase is smaller than the expectation.
That was reported by a survey from Reuters. There is a rumor that the voluntary cut will be done by the OPEC de facto leader, Saudi Arabia. The amount of cut is 1 million barrels per day and that will be applied from February until March.
Many parties believe that this cut is important. It is because the oil demands decline lately due to the coronavirus pandemic. So many countries are still fighting the virus spread. However, the vaccine availability brings new hope.
Production in Russia is the Increase
The production in Russia is increasing in January. However, it is still in line with the stocks that the country has. Meanwhile, the volume of oil declines for that month. It is for sure that there are several reasons why that thing happened.
That rally increases because the United States Congress is ready to adopt the economic stimulus package. Furthermore, it is also caused by the cold season in America that increases the demand of heater oil commodities so far.
Elsewhere, Dollar is near its highest level in two months to the Euro. That happened because many investors could see the wide difference between the US pandemic power of recovery and Europe. Another thing also supports it.
It is about a movement in Washington. That moves to a faster stimulus expense which contrasts with the concern about an extended lockdown in Europe. It is also because of the expectation of Eurozone decline in this quartal.
The Data About USD
The USD is changed for a little. It is $ 1.2038 per Euro in the beginning Asian session. That was happened after strengthen for $ 1.20115 last night for the first time since 1 of December. The greenback rises happened amidst the equity strength.
That was going smoothly in the middle of the risk sentiment and force the reversed relationship. It is especially between the historical relation between currency and stocks. The growth dynamic is relatively better right now.
The dollar also gets an advantage from the huge forces of short-covering. It is especially to the yen where the hedge fund has grouped the biggest short betting that they have to the greenback since October 2016.
Many parties saw the dollar rebound since the beginning of last month as a correction after the unstoppable decline last year. However, some thought that the Dollar strength represents the bearish sentiment in currency. The index of the dollar is recovered 1.2% this year.
