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Oil Seen Heading to $20 by Morgan Stanley on Dollar Strength

  • Dollar, non-fundamental factors are driving prices, bank says
  • Brent fell 10% last week, closing Friday at lowest since 2004
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$20 Crude Oil, Is That Really a Possibility?

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A rapid appreciation of the U.S. dollar may send Brent oil to as low as $20 a barrel, according to Morgan Stanley.

Oil is particularly leveraged to the dollar and may fall between 10 to 25 percent if the currency gains 5 percent, Morgan Stanley analysts including Adam Longson said in a research note dated Jan. 11. A global glut may have pushed oil prices under $60 a barrel, but the difference between $35 and $55 is primarily the U.S. dollar, according to the report.