Oil prices resist the surge in the dollar

The price of Brent 1st-nearby touched $91/b yesterday while the price of WTI exceeded $88.5/b. This is all the more remarkable as at the same time the dollar was soaring after the Fed meeting (see Daily Eco). The inverse relationship between the price of crude oil and the USD is not immutable but it is rare that it breaks down to this extent.

It can be argued that there is currently a geopolitical premium on the price of oil due to what is happening in Eastern Europe. In this respect, it did not help that the US President told his Ukrainian counterpart yesterday that there was a “distinct possibility” that Russia would attack his country in February. But market fundamentals are pushing prices higher: next week’s OPEC meeting is seen as a non-event due to the organisation’s inability to produce as much as its quotas. On the other hand, demand is strong: the IAE estimates that global demand for fuel for road traffic will return to pre-crisis levels in 2022. Diesel stocks are falling worldwide and are particularly low in Asia and Europe where refinery activity is constrained by high gas and CO2 prices.