Oil prices reached one-month highs on Tuesday as the dollar fell, making commodities priced in the US currency more attractive, allowing investors to pay less for dollar-denominated oil using other currencies.
Brent crude futures for June delivery rose by more than 1%, hitting a session high of over $ 68 a barrel at 09:15 GMT. US West Texas Intermediate (WTI) crude futures for May delivery, which expire on Tuesday, were also up over 1%, trading above $ 64 per barrel.
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“US dollar weakness continues to offer support to the commodities complex… despite concerns over oil demand in certain regions,” ING Economics said in a note seen by Reuters.
On Monday, the dollar index dropped to a six-week low against a basket of major currencies after a plunge in US Treasury yields last week, and remained near the low of 91.055 on Tuesday.
According to a preliminary Reuters poll, US crude oil and distillate stockpiles are projected to have decreased last week, while gasoline inventories likely grew, thus, weighing in on the price rise.
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Earlier this week, Libya’s National Oil Corp (NOC) declared force majeure on shipments from the port of Hariga. The news sees Libyan oil output slump below 1 million barrels per day for the first time since October. The company said it could extend the measure to other facilities due to a budget dispute with the country’s central bank.
Saudi Arabia’s crude oil sales reportedly dropped to their lowest in eight months, as the world’s biggest oil exporter is committed to a production cap to boost oil prices.
At the same time, surging coronavirus cases in India, the world’s third-biggest importer and consumer of crude, dimmed enthusiasm for a sustained recovery in global fuel demand, capping further gains.
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This article originally appeared on RT Business News