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 that potentially supports more fuel consumption.
US West Texas Intermediate crude futures were at $59.60 a barrel. That was up 31 cents, or 0.5%, from their last settlement, CNBC reported. Brent crude futures were at $62.97 per barrel, up 38 cents, or 0.6%, 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, the 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% to 89.92 on Tuesday.
A weaker dollar makes fuel imports cheaper for countries that use other currencies domestically, potentially spurring demand. On Tuesday, stock markets 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.
OPEC said on Monday world oil demand would grow faster than expected in 2018 because of a healthy world economy, adding a tailwind to the producer group’s effort to remove a supply glut by cutting output.
But the global market will return to balance only toward the end of 2018, no earlier than previously thought, as higher prices encourage the US and other non-member producers to pump more, OPEC said in a monthly report.
The Organization of Petroleum Exporting Countries said world oil demand would rise by 1.59 million barrels per day this year, an increase of 60,000 bpd from the previous forecast.
“Recently, healthy and steady economic development in major global oil demand centers was the key driver behind strong oil demand growth,” Vienna-based OPEC said in the report.
“This close linkage between economic growth and oil demand is foreseen to continue, at least for the short term.”
