Crude oil prices for West Texas Intermediate (WTI) dipped below $74.4 a barrel on Monday, ending a streak of five days of increases. This decline was influenced by the strengthening U.S. dollar, which makes oil, priced in dollars, more expensive for holders of other currencies.
Oil Prices Surge 5% on Global Economic Hopes
The dollar reached near its highest level in two years, and investors are now focusing on upcoming U.S. economic reports that might affect the Federal Reserve’s decisions on interest rates.
Last week, oil prices jumped almost 5% due to anticipated economic boosts from China, heightened demand because of colder weather in Europe and the U.S., and decreasing U.S. oil inventories.
Iran Oil Output to Drop Amid Trump Policy Shifts
However, on the supply front, projections from Goldman Sachs suggest a decrease in Iran’s oil output and exports by the next quarter because of expected policy shifts and increased sanctions with Donald Trump’s incoming presidency.
The future of this year’s oil market is still hard to predict, with worries about too much supply, potential restarts of halted production by OPEC+ members, and less demand from China.