It turns out that not only a currency can largely depend on a commodity but also vice versa. For example, while the Russian ruble blindly follows oil prices, crude falls under the influence of the US dollar, which is used to evaluate crude price.
The recent strengthening of the American currency put additional downward pressure on oil prices. The strong dollar makes crude more expensive for holders of other currencies. Besides, it makes investments in commodities less profitable, as most raw materials, including oil, are also sold for dollars. In addition, crude is under pressure of rapidly growing production in the US, as well as high production in the OPEC states. According to Thomson Reuters Oil Research, the OPEC exports reached a record level of 26.11 million barrels a day in July. Russia also maintains high oil production. Rosneft, the Russian oil producer, reported an increase in oil extraction by 11.1 percent to 56.08 million tons in the second quarter of 2017.
That is why, experts are sure that crude prices will fall even further. "Developments this week have seen some pessimism return to markets. We forecast Brent to trade at around $53 per barrel in Q4 2017," the National Australia Bank said.
