Additionally, more oil traders are paying closer attention to the U.S. dollar trade as the greenback begins to appreciate against foreign currencies. The inverse correlation between the dollar and Brent was at its highest in three years about two weeks ago, Reuters reports.
With the Federal Reserve eying an interest rate hike later this year, some observers argue taking a long dollar/short crude bet if the greenback continues to appreciate.
“If the dollar index goes from today’s mid-90 levels to above 120, then oil below $50 will be very much a reality,” Doug King, chief investment officer for Merchant Commodity Fund, said in the Reuters article.
United States Brent Oil Fund
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Max Chen contributed to this article.