Oil prices resumed their rise after yesterday's fall, which was facilitated by the pullback of the US currency and news of Donald Trump's intention to impose new tariffs. Meanwhile, the price increase was limited by the easing of geopolitical tensions due to hopes for a cease-fire between Israel and Hezbollah.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) decreased by 0.01% to 106.81. At the beginning of today's session, the index reached 107.49 amid reports that Trump has promised that he would impose a 25% tariff on all products from Mexico and Canada, and an additional 10% tariff on goods from China.
As for the situation in the Middle East, a cease-fire between Israel and Hezbollah may reduce the risk to oil supplies. However, it remains unclear whether Hezbollah will agree to a truce. Experts warn that a deal between Israel and Iran could still fail, which would see any short positions being quickly reversed.
Overall, oil prices have remained in a narrow range since mid-October, while investors weigh the geopolitical risks centered around supplies from Russia and Iran against expectations of an oversupply of oil next year.