Oil prices saw a marginal rebound today after briefly slipping to a 13-year fresh low below $28. The termination of western sanctions, which were imposed on Iran, confirmed fears of an addition of oil output to the present piling reserves.
Brent crude sank to a level as low as $27.67 in Asia today, indicating a fall of 4.4% over Friday’s level. However, Brent recovered from its 13-year lows to trade at $29.05. After being relieved of sanctions, Iran’s oil minister has promised to contribute up to 500,000 barrels per day to the global oil market. This implies that Iran will further worsen the current oil glut position, which is likely to reflect in the oil prices going ahead.
Despite the imminent rise in the oil supply in the coming days, Saudi Arabia’s oil minister Ali al-Naimi has expressed confidence that the market forces, as well as cooperation within oil producing nations, can help oil price recovery. Meanwhile, Oman’s Oil Minister Mohammed Al-Rumhy has requested the oil exporting countries to trim down the combined output by 5-10% to help bring stability in the oil situation.
Dollar gains ground
On the currency front, the U.S. dollar has gained strength against major global currencies after the China’s central bank came out with fresh measures to contain speculation and guide yuan higher.
The Chinese central bank stated on Monday that it will soon start imposing a reserve requirement ratio for domestic deposits held by offshore banks’, which is aimed at curbing speculations on yuan. Alongside this, the People’s Bank of China has also guided the stronger Yuan.
USD/JPY traded 0.26% up at 117.34 while the Euro fell by 0.20% against the dollar to 1.0894. However, the dollar traded weak against the British pound, which was up by 0.21% to 1.4287. The U.S. dollar index, which compares the greenback’s strength against the major global currencies, was seen trading up by 0.14% to 99.12.