Edited excerpts:
What explains this rebound coming in crude prices? Brent is already at $79 plus levels and who knows we will be back to $80 soon?
Certainly. If we look at Brent, we are now drawing close to the point in time when we will see Iran go under sanctions and when that happens. the markets will see something like 2 million barrels of oil coming out of the supply chain.
There is a trade war in the world and demand could get impacted and economies could remain under stress. That explains why commodity prices have come down of late but crude is singing a different tune. For crude, people are not focussing on demand, everybody is focussing on supply. If the world slows down, will that have an impact on demand also?
Historically, we have seen how crude oil prices have gone up but dollar value or dollar index has not shown much of strength. This time, it seems to be slightly different. How are you reading the strength both in commodities as well as crude oil price and the dollar index? What would be the implications on the global economy at large?
The dollar index has been rising generally throughout the course of 2018 and it has had very little impact on the oil price. The oil price fluctuation has a fair bit to do with the logistics chain of oil. It goes from ground to consumer in a very quick time and that does not allow the currency impacts to have any major effect. Overall, if the US dollar climbs, we would expect to see commodity prices in terms of base and precious metals falling, but we do expect to see the crude prices remain immune from that impact.
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