Jul 11, 2019
Oil Pushes Higher with US CPI Expected Today
Yesterday, crude oil broke above $60 a barrel. It is now trading at its highest level since the 23rd of May. There are a variety of factors which could prompt more upside momentum, pushing the crude oil price to $63.5 a barrel in the short- to- medium term.
The factors that could impact this commodity’s price is the positive jobs report that was released last Friday. That is, as more jobs are created in the US, the demand for oil is supported. The second factor that may influence the price of oil is the current geopolitical pressure from the Middle East. With the added sanctions on Iran by the US, pressure between Iran and the UK over oil transportation has been created. In addition, this pressure has also created tensions between UK army ships and Iranian ships in the Persian Gulf. The third factor to boost oil’s uptrend is the weaker US dollar (USD) in the last 24 hours. This decline in the USD is linked to a possible interest rate cut by the Federal Reserve on the 31st of July.
In other financial news today, at 12:30 GMT, the US CPI (Consumer Price Index) will be released, which is an inflation report. The markets are strongly speculating that interest rates will be reduced on the 31st of July, plus the stock market is currently in an uptrend and this is based on the expectation that inflation will be low in the US. If there is any upside surprise today, this could prompt a stock market sell-off and push the USD higher.