(London) Oil prices oscillated between gains and losses on Monday, between optimism due to rate cuts in important central banks, European elections strengthening the dollar or even OPEC and its production levels.
Around 5:35 a.m. (Eastern time), the price of a barrel of North Sea Brent, for delivery in August, rose 0.15% to $79.74.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in July, gained 0.09% to $75.60.
The prices of the two global benchmarks found support in the first rate cuts by major central banks last week.
The Bank of Canada lowered its key rate on Wednesday by 0.25 percentage points to 4.75 per cent, for the first time in more than four years. The ECB also cut its key interest rates by 0.25 points for the first time since 2019, to 3.75%.
Mr. Varga, however, observes at the start of the European session a “rise in the dollar […] due to the surprise dissolution of the French National Assembly following the victory of the far right during the European parliamentary elections” on Sunday.
Since black gold prices are denominated in dollars, an appreciation of the American currency discourages oil purchases by reducing the purchasing power of buyers using other currencies.
DNB analysts also point out that crude prices had been weighed down by “the ambition of OPEC (the Organization of the Petroleum Exporting Countries and their allies, Editor’s note) to reintroduce 2.5 million barrels per day of here at the end of September 2025.”
Several ministers from major OPEC members, however, took turns last week to qualify the alliance’s announcements and evoke a possible status quo if prices justified it.
The group itself had affirmed that it retained the possibility of pausing its plan.
Investors are awaiting the publication of the monthly oil report from the Organization of the Petroleum Exporting Countries (OPEC) on Tuesday, then that of the International Energy Agency (IEA) on Wednesday.