Strong dollar leads to decline in oil prices

Political uncertainty in the US supported a higher US dollar, affecting global oil demand and prices.

Oil prices decreased on Monday as a strong dollar ramped up prices for non-US currency holders and discouraged investors. 

International benchmark Brent crude traded at $84.80 per barrel at 10.57 a.m. local time (0757GMT), a decline of 0.27% from the closing price of $85.03 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $80.75 per barrel at the same time, a 0.33% fall from the previous session that closed at $81.02 per barrel.

Former US President Donald Trump was targeted in an assassination attempt during a rally in Pennsylvania on Saturday, just days before he was set to accept the Republican nomination for a third term.

Political uncertainty in the US supported a higher US dollar. The upward trend in the US dollar against other currencies dulled oil demand and supported price declines. The US dollar index rose by 0.11% to 103.892 at 10.57 a.m. local time (0756 GMT).

A strong dollar reduces demand by making oil more expensive for foreign currency users.

Meanwhile, efforts to implement a cease-fire in the Middle East, home to the vast majority of global oil reserves, continue to impact oil prices.

For months, the US, Qatar, and Egypt have been mediating efforts to reach an agreement between Israel and Hamas that would ensure a hostage exchange and a cease-fire.

However, while cease-fire negotiations are ongoing, an Israeli attack Saturday on a displaced people’s camp in Gaza’s al-Mawasi area near Khan Younis killed at least 90 people and wounded at least 300 others.

Reports emerged that Hamas had suspended the cease-fire talks with Israel following the deadly attack.

Hamas denied reports about suspending Gaza cease-fire and prisoner swap talks following an Israeli airstrike.