Oil falls with stronger dollar compounding virus risks

Oil falls with stronger dollar compounding virus risks

Bloomberg

Oil falls alongside a strengthening dollar as near-term risks to the demand recovery emerged ahead of a Opec+ meeting this week to decide on output policy. Futures in New York fall as much as 2.6%, with the Bloomberg Dollar Spot Index rising to the highest since November, thereby reducing the appeal of commodities priced in the currency. Weaker US equities also weighed on oil prices, while Treasury yields rise. The market is contending with a spate of near-term setbacks for the outlook in crude consumption. Germany is planning to recommend the use of AstraZeneca Plc's Covid-19 vaccine only for people over 60 in another threat to Europe's inoculation campaign, while the head of the US Centers for Disease Control and Prevention warned of "impending doom“ as cases and deaths in the country pick up. "The US dollar continues its rapid ascent, pressuring commodity prices lower with oil and metals taking the brunt of the selling,“ said Ryan Fitzmaurice, commodities strategist at Rabobank. The dollar strength "undermines the inflation worries and fears of currency debasement, both of which have been key factors in the renewed commodity index interest this year.“ Oil is poised to close out a fourth quarterly advance on