Oil Prices Stay Economical When Bought in Euros

Crude oil futures have rebounded significantly since reaching their lowest point earlier this month—unless you’re buying in euros. Brent futures have dropped by 11% this year, but European customers face an even steeper decline due to a weak dollar. A barrel priced at around €58 is nearing its lowest level since 2021, reflecting a 19% decrease this year. Typically, a weaker dollar makes commodities like oil more appealing, as it boosts purchasing power for many. This often results in increased short-term consumption and promotes long-term hedging tactics to lock in supply costs. Following the crude plunge, indicators reveal that both short-term and long-term demand are on the rise.

Earlier this month, the euro saw its fastest increase since 2009, gaining considerably from the dollar’s decline.

“We observed some significant buying earlier this week, and what caught our attention was the appealing price when viewed in euros per barrel,” remarked Bjarne Schieldrop, chief commodities analyst at SEB AB. “This aligns with the classic idea that a weaker dollar is generally bullish. Buyers outside the US can obtain cheaper oil in their local currency, which may slightly boost oil demand.”

According to market insiders, airlines and shipping firms took advantage of prices falling below $60 a barrel earlier this month to secure supplies. Additionally, heating oil sales in Germany surged, with one platform reporting its best sales day since its launch two decades ago.

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