Renewed strength in the dollar caused the oil market to retreat on Wednesday — and analysts say oil investors should continue watching the currency’s movement as an indicator on Thursday.
Oil prices lowered as the dollar rallied on news that Asia will continue to buy U.S. Treasurys regardless of the U.S. credit rating. Oil prices had touched 7-month highs earlier in the week.
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An energy report showing an unexpected 3 million barrel increase in crude also drove prices down, but analysts say that considering the market’s recent resilience to supply and demand issues, it likely didn’t have as strong an effect.
The dollar rally also had an effect elsewhere in commodities, causing gold to rise more than $20 and copper to fall sharply. (Analyst Blog: Should You Get Out of Gold?)
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