As the dollar fell from a 12-week high due to improving risk sentiment in the financial markets, crude oil yesterday closed down by -0.26% at 6503. Gains overall were modest as the perception of tighter supply was countered by the possibility of loosening sanctions against Iran and Venezuela. After China announced additional measures to rescue its ailing economy and sputtering stock market, oil prices received some support, allaying concerns about fuel consumption.
Over the weekend, China allowed the formation of 37 retail funds and cut the stamp tax on stock trading in its most recent effort to support ailing markets. As data revealed China’s industrial earnings continued to decline for a seventh month, additional efforts to attract investors were announced. Talks between the United States and Iran to resurrect the nuclear agreement are reportedly taking place in the meantime.
In an effort to increase supplies, there is also much speculation that the United States may relax its sanctions against Venezuela. Concerns over China’s economic prospects also outweighed the effects of supply cuts from OPEC+ members like Saudi Arabia and Russia. The head of the Federal Reserve stated that the central bank is ready to hike rates further if necessary and that inflation is still too high.
