The two firms say that crude could reach triple digits next year as central banks pump cash into their economies to revive growth. The Dollar index has dropped 7% in the last two months as the Fed moved nearer to a bond-purchase program, luring investors to raw materials, including oil.
“It’s likely to push prices upwards,” Antoine Halff, former principal administrator at the International Energy Agency told Regal Group International sources recently. “The past few years have shown that the more liquidity in the system, the more cheap money in the system, the more money flows into commodities, in particular energy.”
The U.S. Federal Reserve announced that it intends spending $600 billion buying long-term securities in a program known as quantitative easing.
The oil price has risen 9% this year, lagging behind other commodities which ordinarily benefit from a weaker dollar, with U.S. crude stocks remaining above their five-year average. Gold, at the same time, has climbed 25%, trading at record highs in London in October.
“Quantitative easing will reassert the strong, negative pressure on the dollar,” sources at JPMorgan in New York informed Regal Group International. “If we see the dollar shift, all other things being equal, oil prices will rise.”
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