The appreciation of the US dollar led to a strengthening of the backward correlation between WTI and USD. The negative dependence between Bloomberg Dollar Spot and WTI marked the highest levels since July 2016. Trump statements on an additional levy on industrial metal imports in the United States have led to a significant reduction in risk appetite in the markets and this in turn has increased demand for oil and USD at the same time. According to Bob Yawger, director of Futures Trading at Mizuho Securities, Jerome Powell's statement has done a good job of supporting green money. High US production, a strong dollar, and the increasingly difficult agreement between the OPEC + countries put heavy pressure on oil.
If we look back in time, the impression is that similar moments of negative correlation have led to a reversal of the oil trend. Considering the high levels of this and the strong negative base, we expect the price of black gold to drop from the current levels or at least stay close to the top.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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