Oil Up on Weaker Dollar

Oil prices rose for a fourth consecutive session on Tuesday boosted by a weaker dollar and investors covering short positions, but worries over persistent oversupply capped gains.

Brent crude futures, the international benchmark for oil prices, had gained 25 cents to $46.08 per barrel.US West Texas Intermediate crude futures were up 23 cents at $43.61 per barrel, CNBC reported.

The gains mean the market is up slightly so far this week, after spending much of the last month in negative territory.

The dollar fell 0.1% against a basket of six major currencies, propping up oil, ahead of a speech by US Federal Reserve Chair Janet Yellen.

“Short-term financial investors also significantly scaled back their net long positions in Brent on the ICE last week...and find themselves at their lowest level in a year and a half,” Commerzbank said in a research note.

“Short positions have soared to a new record high, having increased more than four-fold since the beginning of the year.”

The Organization of Petroleum Exporting Countries and its partners have been trying to reduce a global crude glut with production cuts. OPEC nations and 11 other exporters agreed in May to extend cuts of 1.8 million barrels per day until March 2018.

Despite the cuts, which started in January, markets remain well supplied due to rising output elsewhere.

OPEC members Nigeria and Libya are exempt from the cuts and have raised production. Iran was also allowed a small increase to recover market share lost under international economic curbs over its nuclear program.

Libya’s oil production rose to 935,000 bpd, up from 885,000 bpd last week, a Libyan oil source said on Tuesday. Meanwhile Nigeria’s projected August exports are at their highest since March 2016 at around 2 million bpd.

Adding to the bearish supply outlook is an apparent glut in US East Coast product supplies.

Meanwhile, US shale oil output has risen about 10% since last year to 9.4 million bpd, with the number of US oil rigs in operation at the highest in more than three years.

“Traders are also looking ahead to the EIA Energy Conference in Washington, where US shale oil producers are expected to give their view of current market conditions,” ANZ bank said in a note.