Oil Prices Rise On The Back Of Weak Dollar And Hopes For EU Greek Debt Deala

Brent crude rises to all time high of less than $65, a gain of $1.10.

United States Oil Fund LP (ETF)’s (NYSEARCA: USO) stock price fell by 0.25% the previous day, despite a weaker dollar that has made the fuel cheaper for holders of other currencies. It occurred in addition to last minute deal, which seems to be arising out of tough negations that could ensure Greece remains in the EU block to avoid the Union getting a shock from the effects of Grexit.

The dollar has lost its value by 0.5% against the basket of other currencies after the Fed Reserve did not gave a very clear signal regarding the rise of central bank interest rates either for this year or the next, leaving many investors disappointed. This does explain one major reason for the price rise. The devaluation might result in larger payments for oil in dollar terms.

On the other hand, a meeting of the top European Union finance ministers in Luxembourg is seen as the last chance of a political rescue for Greece after a string of failures from previous negotiations. German Chancellor, Angela Merkel, has stated that it was still possible for Greece to reach an agreement with the international creditors for the three institutions, namely the International Monetary Fund, European Central Bank, and the European Union.

Initially, oil price slipped due to the US Energy Information Administration releasing its data showing that gasoline stocks rose by 460,000 barrels last week, way past the 315,000 barrels that was expected by many analysts, despite cutback in oil investments.

Despite the cutback, Brent crude prices has risen by $1.10 to at an all-time high of less than $65, owing to strong demand from the North American hemisphere during the past few months, as many Americans started to hit the road ahead of next month’s July 4th holiday. However, high summer temperatures In the Middle East have played its part too, and that has pushed gasoline prices to an all-time high in the last decade.

This explains why the crude market is still so strong despite the apparent surplus in the market from heavy overproduction from OPEC producers. On top of the conflict in the Middle East, the aforementioned factors are influencing crude supply from the region. Despite the advent of Tropical Depression Bill that has managed to drench parts of Texas, most refineries and oilfield in the Gulf Coast have been unaffected and are running normally, barring any minor interruptions as a safety precaution.