Oil prices holding up in the green zone: they are supported by optimism about the U.S. adoption of the aid package amounting to $2 trillion. On March 24, the price of black gold has added about 3%, on 25 March, the growth continued. So, futures for Brent crude traded at $28,10, adding approximately 3.5%, and WTI — by $of 25.02. Growth is on the order of 4.21%.
“Oil is growing, mainly due to the weak dollar, caused by unprecedented actions of the fed,” explained CNBC senior market analyst at OANDA Edward Moya, “the Volatility of WTI crude oil will remain high, and traders should not be surprised if this rally will eventually stop.”
on Monday, the Federal reserve launched an unprecedented stimulus to support the economy in the context of pandemic coronavirus.
in addition, despite the fact that the adoption of the economic stimulus package of $2 trillion in the Senate had stalled, Secretary of the Treasury Steven Mnuchin expressed confidence that the agreement between the senators will be achieved in the near future.
the Expectation put pressure on the U.S. dollar, as announced measures, in fact, re-start the printing press by pumping the economy with liquidity. So the dollar index, which measures its position relative to the 6 currencies, March 24 fell by 0.5%.
the Falling dollar, in turn, is the driver of higher oil prices, rising demand for raw materials: buyers rush to buy it at lower prices.
however, The total forecast oil demand remains low, in light of the remaining restrictions on the transport and stay of proceedings in many countries. Media has reported that oil tanks from many countries will soon be filled with oil to the top. And expected growth, coupled with overcrowded tanks, can, according to experts, lead to a sharp drop in oil prices.