Oil Prices Hit Fresh High on Uncertain Outlook

WikiFX News (6 Aug)- WTI crude oil embraced a steep rise in prices, up 4.5% to the high level of $43.68, compared to its low level of $41.76. It has recorded a fresh five-month high since March 6. Nevertheless, the outlook of oil remains uncertain because of the insufficient upward momentum in future oil prices resulted from the sluggish job growth in the United States.

U.S. ADP reported on August 6 that, payrolls increased by just 167,000 in July, which is well below market estimates of 1.2 million. Dragged by the prints, oil prices eased back to around $42.50.

Currently, U.S. non-farm payrolls, which is due to release on August 7, is estimated to add just 1.6 million, far below June's figures - a record high of 4.8 million at that time.

It is notable that the dollar is still a safe haven currency recognized by markets. Languishing DXY sends all other currencies, gold and U.S. stock markets to higher level, wherein gold has refreshed a record high of $2,055.8.

WikiFX warns that once the risk aversion grows, the dollar purchase may jump as investors seek safe haven in the greenback, which will limit further gains in oil prices.

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