Oil prices and the US dollar

Main takeaways:

1. The US dollar does not drive oil prices; they are both closely correlated to the performance of the economy and monetary policy.
2. The outlook for the global economy is dominated by recessionary fears.
3. The increase in interest rate in the US is affecting the strength of the US dollar and exhibiting downward pressures on commodity prices, including oil.
4. Despite the war in Ukraine and heightened geopolitical risks as well as the fear of thin OPEC+ spare capacity, oil prices are facing downward pressure because of the gloomy macroeconomic outlook. However, continued volatility is to be expected.