The price of crude oil had a fluctuated move yesterday. That was due to the worsening forecast of winter storms in the United States (US) that triggered concerns about the reduction of US citizens who will travel throughout the holiday season.
Crude oil prices were briefly lifted due to the weakening of the USD and the US plan to increase fuel reserves. However, the strengthening was restrained by the uncertainty of the impact of the increase in COVID-19 cases in China.
The Midwest and Great Lakes regions of the America are expected to experience blizzards starting Thursday. Mean while, TGE cold air moving eastward has the potential to cause rapid temperature drops across the country.
That was according to the National Weather Service data. That is why; so many market participants decided to wait and see the further updates in the market.
Crude Oil Price had Slumped before
The storm is likely to have an impact on travel plans on vacation this time. Some people glad that they are not traveling. It was said by John Kilduff, a partner at Again Capital LLC in New York.
Oil prices briefly fell after news that TC Energy Corp. planned to restart operations of the Keystone pipeline. About two weeks ago there was a pipeline leak that caused the waste of 622 thousand barrels of oil per day.
That situation recorded the worst leak in the United States in nine years. The CMC Markets analyst, Tina Teng, shared her thought and opinion about the situation.
She said that while China eases restrictions on activity, an increase in COVID-19 cases has the potential to lower crude oil demand. Meanwhile, the Fed's uncertainty regarding the US economic recovery also weighed on oil price.
Washington May Buy Much Oil Too
Washington also reportedly plans to buy up to 3 million barrels of oil for its strategic fuel reserves. The United Stayed crude oil reserves last week were expected to fall by about 200,000 barrels.
In the other side, the gasoline reserves are expected to rise, according to preliminary polls made by Reuters. That poll comes ahead of reports from the American Petroleum Institute on Tuesday.
It also comes ahead the Energy International Administration on Wednesday. Gold prices held above $1810 per troy ounce as the U.S. Dollar weakened.
Earlier, the USD plummeted due to a surprise announcement from the Bank of Japan (BoJ). The movement in gold prices so far has been supported by growing market concerns about the risk of the Fed's monetary tightening.
DXY Level was around 104.20
The reason of the situation above is too aggressive policies can cause the United States economy to fall into the abyss of recession. The United States Dollar Index (DXY) was around 104.20.
That commodity seeking to extend the previous day's rebound during Thursday's sluggish Asian session. The cautious sentiment ahead of this week's key data, such as the US Dollar Index is struggling to maintain a recovery above 104.00 ahead of US GDP
The DXY welcomed upbeat data from America. It is also the challenges to sentiment emanating from Russia. It is especially to post its first daily gain in the previous three days.
Nonetheless, the America’s Conference Board (CB) Consumer Confidence surged to an eight-month high of 108.3 for December. It is compared with the market forecast of 101.0.
US Treasury Bond Yield Has a Positive Trend
On the other hand, Ukrainian President Volodymyr Zelensky's US visit and Russian President Vladimir Putin's readiness to increase the country's military potential challenged risk appetite.
Alternatively, a pullback in US Treasury bond yields joined the positive risk news from China in favor of the USD Index. The 10-year Treasury bond yields held back the strengthening of the USD.
That was after falling from monthly high of 3.72% the previous day. Recently, hopes of a faster economic recovery in Germany are still there in the market.
The mixed comments from European Central Bank (ECB) official Mario Centeno joined mixed comments from Joe Biden and President Zelensky are made to restrict DXY movement amid a mixed atmosphere.
