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Crude Oil Price Movements


OPEC Monthly Oil Market Report – October 2017

Impact of US dollar and inflation on oil prices

On average, the

US dollar (USD)

generally declined at the beginning of the month, as expectations for

interest rate hikes by the US Federal Reserve were lower on uncertainties surrounding the potential

economic impact of Hurricanes Harvey and Irma and those around the Korean peninsula. However, interest

rate expectations were adjusted upward in the second half of September as those earlier concerns receded.

Furthermore, the US Federal Reserve left the door open for an additional rate hike this year. These

developments translated into strengthening of the US dollar. This trend continued at the beginning of

October, helped by expectations of higher US growth related to tax reform proposals unveiled at the end of

the month of September by the US government. On average, the dollar dropped by 0.9% m-o-m against the

euro, but the trend of depreciation reversed, reflecting overall dollar strength towards the end of the month

and the uncertainties surrounding the Catalonian government push for independence. The dollar was lower

on average by 0.3% against the Swiss franc. It also lost 2.6% against its Canadian counterpart, due to the

impact of the second-consecutive interest rate increase by the Bank of Canada in September. The dollar was

down by 2.7% m-o-m against the pound sterling as Bank of England officials suggested their willingness to

increase interest rates this year. However, the dollar advanced on the Japanese yen on average by 0.7%


However, the US dollar declined by 1.7% against

Chinese yuan on average in August, though the

majority of losses were reversed towards the end of

the month on top of dollar strengthening. The dollar

advanced by 0.7% m-o-m against the Indian rupee,

but it recently weakened against it after the

Reserve Bank of India left interest unchanged at

the beginning of October. The dollar declined

against commodity exporters’ currencies; for

example, by 0.5% m-o-m against the Brazilian real

and 3.2% against the Russian rubble, mainly due to

strengthening petroleum prices. The US dollar was

stable during the month in relation to the Mexican


In nominal terms, the price of the

OPEC Reference

Basket (ORB)

increased by $3.84, or 7.7%, from

$49.60/b in August to $53.44/b in September. In

real terms, after accounting for inflation and

currency fluctuations, the ORB increased to

Graph 1 - 7: Impact of inflation and currency

fluctuations on the spot OPEC Reference Basket


e 1

$34.66/b in September from $32.60/b (base June 2001=100) the previous month. Over the same period, the

US dollar declined by 0.8% against the import-weighted modified Geneva I + US dollar basket*, while

inflation was flat.


The "Modified Geneva I + US$ Basket" includes the euro, the Japanese yen, the US dollar, the pound sterling and the

Swiss franc, weighted according to merchandise imports by OPEC Member Countries from the countries in the basket.








Sep 13

Jan 14

May 14

Sep 14

Jan 15

May 15

Sep 15

Jan 16

May 16

Sep 16

Jan 17

May 17

Sep 17


Nominal Reference Basket price

Real Reference Basket price

Source: OPEC Secretariat.


June 2001 = 100