- Oil corrects lower following a 3.5% rally over the last two days.
- US Dollar’s recovery from six-week lows is weighing on Crude prices.
- Geopolitical tensions and wildfires in Canada are keeping downside attempts limited.
Oil has been trimming some gains over the last sessions, weighed by a stronger US Dollar, but it remains close to the six-week highs above $63.00 reached on Tuesday.
The US Dollar Index, which measures the value of the Greenback against the six most traded currencies, bounced up about 0.7%, buoyed by strong US job openings data, which has triggered a moderate correction in Crude prices.
A mix of geopolitical factors, however, is keeping downside attempts limited. Russia and Ukraine are far from any significant peace deal, while the US-Iran nuclear talks, which might ease restrictions for one of the world’s largest Oil suppliers, seem to have stalled.
Reports that wildfires in Canada have disrupted about 7% of Canadian Oil supply, or more than 344,000 barrels per day, are contributing to raising concerns about supply.
Apart from that, Eurozone inflation fell below the ECB’s 2% target, according to data released on Tuesday. These figures point to further monetary easing by the ECB, which is likely to bolster economic growth in the region and support demand for Oil.
