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Oil price surge dents rand rally

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Cape Town – An almost 25% gain in the oil price this week has put a dent in the rand’s rally, with the local currency trading 0.21% down at R13.41/$ on Friday at 08:30.

“The oil rally is proving a hindrance for the rand,” said RMB analyst John Cairns. “Brent pushed through the psychological $50/bbl level overnight, for a gain of almost 25% in the past two weeks.”

“Oil gains can at times be good for the rand, like early this year when the market bounced off its post-crisis lows of US$27/bbl,” he said. “This time around, however, the oil rally is not a sign of better global economic conditions, but rather due to speculation that oil producers might cut back supply.

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