Oil prices fell. The Fed raises interest rates to promote the appreciation of the US dollar. Oil is priced in US dollars. If the US dollar is valuable, then the natural price of oil will fall, which will have a certain pressure on crude oil and asphalt commodities. Crude oil asphalt is directly linked to the U.S. dollar. An increase in the interest rate of the U.S. dollar will inevitably lead to the support of the U.S. dollar in the international market. The continuous increase of interest rates in the U.S. means that crude oil asphalt should be sold as the U.S. interest rate rises.
U.S. dollar rises as U.S. Federal Reserve raises interest rates, oil prices fall. The Fed raises interest rates to promote the appreciation of the US dollar. Oil is priced in US dollars. If the US dollar is valuable, then the natural price of oil will fall, which will have a certain pressure on crude oil and asphalt commodities.
Saudi Arabia is the world’s largest oil producer and one of the most important allies of the United States in the Middle East. The alliance between Saudi Arabia and the United States ensures the continuation of petrodollar hegemony, so this hegemonic monopoly needs to be broken. It is precisely because international oil prices are denominated in US dollars that when the US dollar appreciates, the price of crude oil will fall, because more crude oil can be bought with the same US dollar.
Crude oil asphalt is directly linked to the US dollar. The increase in the US dollar interest rate will inevitably lead to the US dollar being supported by buying in the international market, and more people will buy US dollars because of interest. Then the continuous increase in US interest rates means that crude oil Asphalt should sell off as U.S. interest rates rise.
In short, the impact of the Federal Reserve on crude oil asphalt prices is not a simple proportional or inverse relationship. It needs a comprehensive analysis based on the macroeconomic background, economic cycle and other short-term factors at that time. In the long run in the future, we need to be alert to the possible pressure on the commodity market and crude oil asphalt caused by the Fed’s interest rate hike.