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Crude Oil Price Movements

OPEC Monthly Oil Market Report – September 2017


Impact of US dollar and inflation on oil prices


US dollar (USD)

generally declined in August against both major currency counterparts and emerging

market currencies, mainly on the anticipation of a more gradual pace of interest rate increases by the US

Fed. On average, the dollar dropped by 2.4% m-o-m against the euro – down 10.7% compared with last

December. Part of the weakness against the euro is related to the expectation that plans for the removal of

some degree of monetary policy accommodation, would be announced by the European Central Bank in the

upcoming meetings. The USD declined by 2.2% m-o-m against the Japanese yen, partly as a result of

uncertainties associated with tensions in the Korean Peninsula. It lost 0.6% against its Canadian counterpart.

These losses accelerated at the beginning of September after the Bank of Canada raised interest rates for

the second time this year. However, the dollar was slightly up by 0.2% against the pound sterling and by

0.4% against the Swiss franc.

On average, the US dollar declined by 1.4% against Chinese yuan in August – down by 3.5% since

December. China’s international reserves have risen since February on the effect of tightening capital

controls as well as some valuation effects. The dollar declined by 0.8% m-o-m against the Indian rupee, in

spite of the Reserve Bank of India cutting interest rates at the beginning of August, and it is down by 5.8%

since December. The dollar declined by 1.7% m-o-m against the Brazilian real, while falling by a slight 0.1%

on average against the Russian ruble, though declines accelerated towards the end of the month in tandem

with strengthening oil prices. The US dollar declined against the Mexican peso by a slight 0.2% - down

13.2% since last December, and is currently below the levels preceding the US election.

Graph 1 - 6: Impact of inflation and currency fluctuations on the spot OPEC Reference Basket price


In nominal terms, the price of the

OPEC Reference Basket (ORB)

increased by $2.67, or 5.7%, from

$46.93/b in July to $49.60/b in August. In real terms, after accounting for inflation and currency fluctuations,

the ORB increased to $32.60/b from $31.23/b (base June 2001=100). Over the same period, the US dollar

declined by 1.4% against the import-weighted modified Geneva I + US dollar baske

t 1

, while inflation declined

by 0.1%.


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 the merchandise imports of OPEC Member Countries from the countries in the









Aug 13

Oct 13

Dec 13

Feb 14

Apr 14

Jun 14

Aug 14

Oct 14

Dec 14

Feb 15

Apr 15

Jun 15

Aug 15

Oct 15

Dec 15

Feb 16

Apr 16

Jun 16

Aug 16

Oct 16

Dec 16

Feb 17

Apr 17

Jun 17

Aug 17


Nominal Reference Basket price

Real Reference Basket price

Source: OPEC Secretariat.

Base: June 2001 = 100