Strong US Dollar, Debt Ceiling Concerns Drive Oil Prices Down on Thursday

(MENAFN) Oil prices experienced a decline on Thursday due to the impact of a stronger US currency, which deterred importers of US-indexed crude oil. The international benchmark Brent crude traded at USD78.09 per barrel, reflecting a 0.34 percent fall from the previous trading session's closing price of USD78.36. Meanwhile, the American benchmark West Texas Intermediate (WTI) traded at USD73.95 per barrel, down 0.52 percent from the previous session's close of USD74.34.

The rise in the value of the US dollar played a significant role in the drop in oil prices. The US dollar index, which measures the value of the American currency against a basket of other currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc, recorded a 0.17 percent increase, reaching 103.972. When the US dollar strengthens, it makes dollar-indexed crude oil more expensive for buyers who hold other currencies.

In addition to the impact of the strong US dollar, concerns about the ongoing debt limit crisis in the US also exerted downward pressure on oil prices. The US reached its debt ceiling at the beginning of the year, leading to a debt limit crisis. Secretary of the Treasury Janet Yellen warned on May 1 that the temporary measures implemented to address the crisis might be insufficient.

The combination of the stronger US dollar and the uncertainties surrounding the debt limit crisis has contributed to the decline in oil prices. Market participants are closely monitoring developments in the debt ceiling situation, as it has the potential to affect the global economy and financial markets. Any resolution or escalation of the crisis could impact oil prices in the coming days and weeks.


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