Oil prices hit their lowest in three months during Monday’s Asian session despite OPECs’s commitment to cut production. The price drop resulted predominantly from the continued addition of U.S. oil rigs for the eighth consecutive week. U.S. crude inventories rose last week by 8.2 million barrels, reported the Energy Information Association.
Brent crude fell 35 cents per barrel a 0.68 percent drop, to trade at $51.02 per barrel, its lowest price since November 30. U.S. WTI crude plummeted 0.87 percent to $48.07 per barrel, a 42 cent decline. Brent crude had also fallen 1.6 percent on Friday.
Currency Market Movements
The euro firmed 0.2 percent on Monday to trade at $1.0699 after hitting $1.0701, its highest level since February 9. All eyes are now on the U.S. Federal Reserve which is expected to raise interest rates by a quarter point this week, placing rates between 75 basis points and 1 point The dollar eased 0.2 percent against the yen to trade at 114.66, retreating from Friday’s high of 115.50. The dollar index was down 0.1 percent on Monday to 101.13 .DXY, its lowest since February 28.
The pound gained 0.1 percent during Monday’s Asian session after losing nearly 1 percent against the euro on Friday after news from the ECB shook the markets. The euro was trading at 87.83 to the pound on Monday.
In addition to announcing an interest rate hike this week the Fed is also expected to provide new economic forecasts and their “dot plot” which is their interest rate forecast. The dot plot currently forecasts three rate hikes this year and traders are eagerly waiting to see whether this forecast will hold.