Brent crude oil began Friday poised for its largest weekly gain since the end of April. The commodity traded at $104.03 at 9:06 GMT on Friday morning after the dollar fell sharply and investors regained confidence that the US Federal Reserve would continue its economic stimulus plan.
Major Drivers
US economic indicators have been major drivers of oil prices over the past few weeks as investors worry that the Fed will scale back its $85 billion per month quantitative easing plan which has injected billions of dollars into the markets. Currently, the stimulus program is keeping the dollar soft which makes oil less expensive to holders of other currencies. If the Fed's stimulus program is cut back, the dollar will likely strengthen and boost Brent prices.
Brent also found support from news that the Buzzard oilfield suffered its second production outage in less than a week. The UK North Sea field normally produces about 200,000 barrels per day, so its interruption has tightened supplies and driven prices upward.
Dollar Driven
Moving forward, most analysts are expecting to see the US dollar drive oil prices more than supply and demand factors. Some see oil falling in the long term since the dollar is expected to strengthen when the Fed eventually eases up on its stimulus spending.
Major Drivers
US economic indicators have been major drivers of oil prices over the past few weeks as investors worry that the Fed will scale back its $85 billion per month quantitative easing plan which has injected billions of dollars into the markets. Currently, the stimulus program is keeping the dollar soft which makes oil less expensive to holders of other currencies. If the Fed's stimulus program is cut back, the dollar will likely strengthen and boost Brent prices.
Brent also found support from news that the Buzzard oilfield suffered its second production outage in less than a week. The UK North Sea field normally produces about 200,000 barrels per day, so its interruption has tightened supplies and driven prices upward.
Dollar Driven
Moving forward, most analysts are expecting to see the US dollar drive oil prices more than supply and demand factors. Some see oil falling in the long term since the dollar is expected to strengthen when the Fed eventually eases up on its stimulus spending.
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