SINGAPORE: Oil prices rose on Tuesday, lifted by a rebound in global stock markets that followed sharp falls last week, as well as by a weaker dollar which potentially supports more fuel consumption.
US West Texas Intermediate (WTI) crude futures were at $59.60 a barrel at 0759 GMT. That was up 31 cents, or 0.5 percent, from their last settlement.
Brent crude futures were at $62.97 per barrel, up 38 cents, or 0.6 percent, from the previous close. “Oil markets attempted a half-hearted recovery overnight on little more than an equity market correlated bounce, and indeed the weaker US dollar added to the momentum,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.
The dollar’s index against a basket of six major currencies fell 0.3 percent to 89.923 on Tuesday. A weaker dollar makes fuel imports cheaper for countries that use other currencies domestically, potentially spurring demand.
Meanwhile, stock markets on Tuesday pulled away from two-month lows from the previous week, when shares were roiled by some of the sharpest falls on record, shaking confidence across markets.
With markets seemingly returning to calmer waters, oil traders said attention was turning to inventory levels to gauge crude supply levels.
“The change in inventories this week will be crucial for determining whether further declines in the oil price are on the cards,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.
The private American Petroleum Institute (API) is due to publish crude inventory estimates on Tuesday, while the government US Energy Information Administration (EIA) is set to release its fuel storage and crude production data on Wednesday. On the demand side, the Organization of the Petroleum Exporting Countries (OPEC) said on Monday it expected world oil demand to climb by 1.59 million barrels per day (bpd) this year, an increase of 60,000 bpd from the previous forecast, reaching 98.6 million bpd.
Published in Daily Times, February 14th 2018.
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