Commodity Daily News

Oil Prices Plummet as USD Surges vs. EUR

Oil prices pushed beyond $103 a barrel yesterday after investors viewed the recent downward correction as a natural process to help get prices in line with supply. However, a shift in risk sentiment which favored the US dollar (USD) against the euro (EUR) has helped drop commodity values after investors shifted into safer assets. The Swiss franc (CHF) and Japanese yen (JPY) are on the rise and physical assets usually would jump with heightened risk aversion, but the positive movement of the dollar asserted itself over the value of oil.

The decision point anticipated since Monday appears to have been reached yesterday morning, but technical forces appeared to have tested the recent jump and found it wanting. Whether oil traders decide to lift oil prices again will depend on manufacturing and industrial growth figures out of the major global economies. Employment also appears to be a top priority in this growth sentiment and oil traders are eyeing this week's NFP data out of the United States to verify their revamped growth schedule for oil prices, especially with Europe on holiday today.