Oil's bull run is taking little notice of the strong U.S. dollar, breaking crude's historical inverse link to the greenback and giving analysts confidence it has further to go based on current market fundamentals.
A strong dollar typically weighs on oil prices because it makes the commodity more expensive for holders of other currencies, potentially hurting demand for crude.
This time the dollar is being boosted by its safe-haven appeal as clouds gather over the economic outlook while oil is being driven higher by disruptions to Russian supplies linked to the conflict in Ukraine and strong demand, analysts say.
The dollar and oil have been moving in the same direction since late March, when the positive correlation hit its highest since May 2019, and analysts expect the link to persist given the tight oil market and broader risks to the global economy.
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