Oil Price rises on weaker US dollar


Middle East
A general view of a refinery in Hobbs. Via Metro.co.UK

Oil prices rose on Tuesday, helped by a weaker dollar and expectations that crude inventories will fall in the United States, the world's largest oil consumer, while gains were limited by increasing coronavirus cases in Asia.

At 0157 GMT, Brent crude futures for June delivery were up 29 cents, or 0.4 percent, to $67.33 per barrel.

WTI crude futures for May delivery, which expire on Tuesday, were up 19 cents, or 0.3 percent, to $63.57 barrel. The more active June contract was up 0.4 percent, or 28 cents, to $63.71.

If the dollar falls in value, buyers who use other currencies pay less for dollar-denominated crude.

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ING Economics said in a report that “US dollar weakness continues to give support to the commodities complex... amid doubts about oil demand in some regions.”

Following a drop in U.S. Treasury yields last week, the dollar index fell to a six-week low against other major currencies on Monday and stayed near the low at 91.055 on Tuesday.

According to a preliminary Reuters poll released on Monday, US crude oil and distillate stockpiles were expected to fall last week, while gasoline inventories were expected to rise.

The poll was conducted ahead of reports from the American Petroleum Institute (API) on Tuesday and the Energy Information Administration (EIA), the US Department of Energy's statistical arm, on Wednesday.

Because of a budget dispute with the country's central bank, Libya's National Oil Corp (NOC) declared force majeure on Monday on exports from the port of Hariga and said it could expand the measure to other facilities.

According to ING, the disruption could reduce Libya's oil production by 280,000 barrels per day (BPD), bringing output below 1 million BPD for the first time since October.

The Joint Organisations Data Initiative (JODI) reported on Monday that Saudi Arabia's crude oil exports dropped to their lowest level in eight months in February, demonstrating the world's largest oil exporter's adherence to its voluntary production limit to support oil prices.

However, rising COVID-19 cases in India, the world's third-largest oil importer, and buyers have dimmed expectations for long-term recovery in global fuel demand.

Publish : 2021-04-20 09:17:00

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