It’s never easy to understand how oil prices work, because it’s a confluence of several factors:
- Actual supply and demand
- Predictions of supply and demand
- The strength of the dollar in relation to other currencies (weaker dollar means we have to pay more for a barrel of oil)
Oil prices hit 2016 highs on Thursday, with U.S. crude closing over $40, on optimism that major producers will strike an output freeze deal next month amid soaring gasoline demand in the United States.A weaker dollar after a Federal Reserve policy decision on Wednesday that indicated two U.S. rate hikes this year instead of four also drew oil buyers using currencies such as the euro.
Read Full Story: US oil closes above $40 for first time since Dec. 3
