During the first week of September, oil prices fluctuated between $45 and $50 a barrel. On September 4th prices of oil fell on most of the Asian markets, due to lower volume of trading, as traders and brokers are awaiting the Fed’s report on employment trends, which would determine the date when the Fed is set to raise the interest rate of the dollar. That would further increase the dollar’s exchange rates, which makes it more expensive for consumers who don’t use the US dollar to procure oil, which would include Europe, Japan, China and some smaller regions and countries. Since their oil purchasing power is weakened that way, the demand for oil is hit, which leads to decrease of the oil price in dollars. This counter-proportional correlation between the oil price and the dollar has been known for decades, but has never been so noticeable as from late 2014 onwards. It is notable that traders now watch for the dollar exchange rate trends prior to determining whether to buy or sell oil options or not.

The US employment report is that the number of payrolls rose a bit, but less than expected. Current unemployment rate in the US is around 5.1%. The dollar fell sharply on the market, but later this thawed, assuming that exchange rate trends and its influence on oil prices won’t change much before the Fed finally makes the interest rate decision which would happen during the meeting of September 16-17. Until then, all eyes will be watching on Chinese market, which would determine oil prices in short and long run. Currently, these indexes keep falling, though at a slow rate, but if Fed decides to increase the interest rate oil prices will remain very low throughout the season. Otherwise the oil will go up due to weakening of the dollar, but even then it wouldn’t last long as it indicates issues with global oil demand.

The Eastern Economic Forum is currently being held in Vladivostok, Pacific Russia’s main port. Government of Russia has two major aims: firstly –  to try to convince large and growing Asian economies such as Japanese, Chinese and Korean to procure oil from Russia and secondly – to find a solution to replace the dollar in trading – not only for Russian oil and gas exports, but exports of all commodities from and to Russia. The meeting ends Saturday, and shall play a role in how oil prices change in the following weeks. Russian authorities have said that they should be able to sell a third of their total oil exports to Asian countries, replacing the loss of market caused by Western sanctions. This all would further ease projected growth in oil demand, pushing the oil prices even lower.

What would push oil prices up is a sharp recovery of European stock indexes, which let the European Central Bank consider possible increase of pumping new cash into European economy, which would spark growth and demand.

On September 4th, the prices of WTI and Brent crude kept falling, this trend applies to refined products as well, including heating oil and gasoline.