Oil prices may remain under pressure, increasing risks of deterioration for energy producer currency including the USD, according to the analysts at Amplifying Global FX Capital.
Key Quotes
“On Wednesday 14 June, oil prices dropped to lows for the year on the monthly report from the International Energy Agency (IEA) and weekly report from the US Energy Information Agency (EIA). The IEA point to rising supply despite the OPEC production cut agreement, driven mainly by the US and other non-OPEC producers, but also from OPEC producers (Libya and Nigeria) that are exempt from the production cut agreement. The IEA forecast a longer and more uncertain period before excess inventory is brought back down to more normal levels.”
“Oil prices may remain under pressure, dragging down global inflation expectations, and increasing risks of deterioration for energy producer currency. This may include the USA which is now a large swing variable in oil production.”
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