Oil prices jumped about 2% to a 10-week high on Tuesday, boosted by a falling US dollar, hopes for higher demand in the developing world and supply cuts by the world’s biggest oil exporters.
Brent futures rose $1.51, or 1.9%, to $79.20 a barrel by 1530 GMT. US West Texas Intermediate (WTI) crude rose $1.61, or 2.2%, to $74.60.
Both benchmarks were on track for their highest closes since May 1, with Brent in technically overbought territory for the second time in three days.
The US dollar dropped to a two-month low against a basket of other currencies after US Federal Reserve officials signalled the central bank was near the end of its tightening cycle.
A weaker dollar makes crude cheaper for holders of other currencies.
“Oil has found a floor and the only thing … that could break that is if US inflation is scorching hot and the Fed is forced to tighten this economy into a recession,” said OANDA analyst Edward Moya.
Markets were awaiting US inflation data on Wednesday for clues on the interest rate outlook. Higher rates can slow economic growth and reduce oil demand.
Published in The Express Tribune, July 12th, 2023.