Oil prices at three-month high with weaker dollar

ANKARA (AA): Brent crude price reached a three-month high for week ending Feb. 22 supported by the U.S. Federal Reserve’s decision to pause rate hikes this year while pushing the American dollar lower.

International benchmark Brent crude was trading at $67.40 per barrel at 1230 GMT on Friday, after opening Monday at $66.39 a barrel – a 1.5 percent weekly gain.

American benchmark West Texas Intermediate (WTI) gained 1.9 percent over the week to trade at $57.41 a barrel at the same time after starting Monday at $56.33 per barrel.

Both benchmarks recorded their highest levels since Nov. 16. Brent climbed to as high as $67.69 per barrel on Friday while the price of WTI hit as high as $57.61 on Thursday, according to official data.

The Fed increased its benchmark interest rate four times in 2018, however, the central bank’s decision announced on Jan. 30 to be “patient” for further rate hikes this year has since pushed the American dollar lower against other major currencies.

The U.S. dollar index, which includes the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, fell 0.51 percent on Jan. 30, according to official data.

The index was at 96.523 at 1230 GMT on Friday, down 0.25 percent over the week after it opened Monday at 96.770, the data showed.

Since oil prices are indexed to the American dollar, the lower value for the greenback is likely to trigger higher oil demand around the world.

Although crude prices have ended higher this week, rising U.S. crude oil production continues to worry investors that the glut of supply in the global oil market could be here to stay for longer while halting crude’s upward price trajectory. 

Crude oil output in the U.S. rose by 89,000 barrels per day (bpd) for the week ending Feb. 15 to reach a new all-time record of 12 million bpd, according to the U.S.’ Energy Information Administration (EIA) on Thursday.

This marked the 44th time oil output in the world’s top crude producer increased during the past 58 weeks.

The U.S.’ crude oil production is expected to average 12.4 million bpd in 2019 and 13.2 million bpd in 2020, according to the EIA’s Short Term Energy Outlook report for February.