Morgan Stanley predicts Brent oil price to drop to $20-25

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The price for a barrel of Brent crude oil could fall to $20-25 because of the strengthening of dollar. According to forecasts of Morgan Stanley, a 5% increase of the dollar rate would reduce oil prices by 10-25%.

“The dollar and non-fundamental factors continue to affect the oil price. If other currencies decline as well, this could lead to further strengthening of the dollar, and the fall in oil prices”, – quotes 1prime the report of the Bank analyst Adam Longson, published by Bloomberg.

Longson believes that the strengthening of the dollar by 3.2% due to the likely devaluation of the yuan will automatically trigger a drop in oil prices to 6-15%.

During today’s trading on the London stock exchange ICE, the price of a futures contract for Brent oil for February delivery has exceeded $33, rising to $33.4 per barrel. Earlier Monday, the futures price for Brent crude oil fell by 3.07% to $ 32.52 per barrel. Since the beginning of 2016 Brent price fell by 12%.

Source: Rosbalt

 

Image: Glenn Beltz (under CC BY 2.0).