Oil Prices Stumble Amid Dollar Strength

7 Jan 2025 , 09:26 AM

Following last week’s gain, oil prices continued to decline Tuesday for a second straight session due to technical correction, although predictions of plentiful supply and a strong dollar also played a role.

U.S. West Texas Intermediate (WTI) crude dropped 33 cents, or 0.45%, to end at $73.23, while Brent futures dropped 28 cents, or 0.37%, to $76.02 a barrel.

Due in part to hopes of additional fiscal stimulus to boost China’s struggling economy, both benchmarks surged for five consecutive days last week and ended Friday at their best levels since October.

Uncertainty over the scope of tariffs from the new Trump administration caused the U.S. dollar to fluctuate, but it stayed near the two-year high it reached last week.

For holders of foreign currencies, oil costs more when the dollar is stronger.

The oil market is anticipated to be well-supplied in the upcoming year due to a combination of sluggish demand from China and rising demand from non-OPEC nations, which has also restrained price increases.

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