![\"Gas](\"https:\/\/www.businesspundit.com\/wp-content\/uploads\/2016\/01\/Gas-prices-at-20-dollars-a-barrel-in-2016.jpg\")
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The strong US dollar and weak demand for oil in China could send the price per barrel to $20.<\/p>\n
Analysts at Morgan Stanley said on Monday that a 5% increase in the value of the US dollar would be enough to push down\u00a0oil by between 10% and 25% or about $8 per barrel.<\/p>\n
Crude futures are already trading at around $32.50, near their lowest levels in 12 years. Prices slumped 1.8% on Monday, and are down by 13% in the first weeks of 2016.<\/p>\n
Oil has declined by nearly 65% of its value from its peak 18 months ago.<\/p>\n
Analysts attribute the sudden decline to lower demand from China, a supply glut led by the US shale industry and high output from OPEC, and the continuing strengthening of the US dollar.<\/p>\n
Morgan Stanley global oversupply may have pushed oil below $60 per dollar, but the recent falls are due to sharp currency moves.<\/p>\n
With Saudi Arabia refusing to cut OPEC’s output, the International Energy Agency predicts that an oversupply of oil is likely to continue throughout 2016.<\/p>\n
“Given the continued US [dollar] appreciation, $20-25 oil price scenarios are possible simply due to currency,” the analysts wrote.<\/p>\n
As the dollar strengthens, it makes oil more expensive for buyers paying with other currencies \u2014 which weighs on demand in other parts of the world.<\/p>\n
The Chinese Yuan has fallen by 6% since August, which has affected buying in the country. China is the world’s biggest importer of oil.<\/p>\n","protected":false},"excerpt":{"rendered":"
The strong US dollar and weak demand for oil in China could send the price per barrel to $20. Analysts at Morgan Stanley said on Monday that a 5% increase in the value of the US dollar would be enough to push down\u00a0oil by between 10% and 25% or about $8 per barrel. Crude futures […]<\/p>\n","protected":false},"author":48,"featured_media":62569,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8281],"tags":[7704,7787,7714,9519],"class_list":{"0":"post-62568","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-gas-prices","9":"tag-oil-prices","10":"tag-us-dollar","11":"tag-usa"},"acf":[],"wps_subtitle":"","_links":{"self":[{"href":"https:\/\/www.businesspundit.com\/wp-json\/wp\/v2\/posts\/62568","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.businesspundit.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.businesspundit.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.businesspundit.com\/wp-json\/wp\/v2\/users\/48"}],"replies":[{"embeddable":true,"href":"https:\/\/www.businesspundit.com\/wp-json\/wp\/v2\/comments?post=62568"}],"version-history":[{"count":1,"href":"https:\/\/www.businesspundit.com\/wp-json\/wp\/v2\/posts\/62568\/revisions"}],"predecessor-version":[{"id":62570,"href":"https:\/\/www.businesspundit.com\/wp-json\/wp\/v2\/posts\/62568\/revisions\/62570"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.businesspundit.com\/wp-json\/wp\/v2\/media\/62569"}],"wp:attachment":[{"href":"https:\/\/www.businesspundit.com\/wp-json\/wp\/v2\/media?parent=62568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.businesspundit.com\/wp-json\/wp\/v2\/categories?post=62568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.businesspundit.com\/wp-json\/wp\/v2\/tags?post=62568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}