- The US dollar does not drive oil prices; they are both closely correlated to the performance of the economy and monetary policy.
- The outlook for the global economy is dominated by recessionary fears.
- 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.
- 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.
“Oil Intensity: The curious relationship between oil and GDP“, Christof Rühl and Tit Erker, May 2021
“Global Economy and Energy Markets Weekly Commentary – 11th Sep ’22“, Christof Rühl, Sep 2022