Oil prices hit lowest since Middle East war began; dollar strengthens

The price of oil has hit its lowest point since the conflict in the Middle East began four months ago, with Brent crude reaching $73 per barrel. This decline, if sustained, could translate into lower national fuel prices, offering a potential benefit for inflation calculations. The development comes amid ongoing ceasefire talks between Washington and Tehran.

In parallel, the U.S. dollar has seen a significant increase, accumulating close to 35 pesos this week and reaching 922 pesos on Wednesday. This rise is attributed to the dollar's global strengthening, as it is sought as a safe-haven asset amidst perceived riskier international scenarios. Investors are drawn to the U.S. due to high interest rates, seeking short-term returns.

Carlos García, an academic from the University Alberto Hurtado's Faculty of Economics and Business, explained that the dollar's appreciation is influenced by several factors. The fall in copper prices has reduced the supply of foreign currency, while global market dynamics, particularly high U.S. interest rates, are attracting capital. He suggested that the dollar might be stabilizing around 900 pesos.

Regarding copper, Cochilco reported a 1.14% drop in its price on the London Metal Exchange, reaching $5.97 per pound, the lowest since early May. This decrease is linked to the aforementioned factors and demand weaknesses, particularly from China. Despite the recent drop, CPC President Susana Jiménez noted that copper prices remain attractive and are a driving force for the mining sector. She emphasized Chile's sensitivity to global events, both positive and negative, highlighting that while geopolitical tensions can raise fuel costs, favorable commodity prices like copper continue to support the economy.