Oil rose on Friday as the dollar dropped to an almost two-year low, while demand worries stemming from rising coronavirus cases and US-China market tensions remained high. The dollar fell to a 22-month low against a basket of currencies. The weaker dollar typically encourages purchases of greenback-priced goods, such as gasoline, as they are cheaper for holders of other currencies.
“Crude prices are attempting to stabilize as expectations still remain high that Congress will be successful in delivering another pandemic relief package” for the United States, said Edward Moya, senior market analyst at OANDA in New York. “Yesterday’s U.S. economic data showed that the economic recovery is struggling and pretty much guarantees more federal aid is coming.”
Barclays Commodities Research has said oil prices could see a correction in the near term if a recovery in fuel demand slows further, especially in the United States. The bank lowered its oil market surplus forecast for 2020 to an average 2.5 million barrels-per-day (bpd), from 3.5 million bpd previously.