ALBAWABA – Oil prices rose on Tuesday, bolstered by a weaker US dollar and expectations that the Organization of Petroleum Exporting Countries and its allies (OPEC+) will cut supply to meet lower demand.
Overall, oil prices were up 0.7 percent in early sessions, according to Reuters, with Brent futures barely over the $80 threshold on weaker demand.
Brent crude futures were up $0.57, to $80.55 a barrel and West Texas Intermediate (WTI) crude futures were $0.54 higher, at $75.40 a barrel. Both crudes fell for four and three days, respectively.
However, Brent crude traded below $80 a barrel in prompt contracts and WTI was under $75, according to Bloomberg.
Crude has dropped by around a fifth since late September due to an excess in supply and concerns about the global economic backdrop, putting pressure on the 23-nation alliance.
OPEC+ will convene on Thursday in an online intervention meeting, possibly to lower output and supply to bolster oil prices, led mainly by de-facto leader Saudi Arabia.
Oil prices up on weaker US dollar, OPEC+ expectations - Shutterstock
Notably, the International Energy Agency warned earlier this month that markets would move back into surplus next year amid a dramatic slowdown in demand growth.
Bloomberg reported hedge funds have turned increasingly bearish on crude, which is indicative of weaker demand. Meanwhile, money managers slashed combined net-long Brent and WTI positions to the lowest since late June, according to the latest weekly data from ICE Futures Europe and the CFTC running to November 21.
Oil options skews have also been showing bearish put biases, while widely watched timespreads have also eased, the New York-based news agency confirmed.
On the other hand, the US dollar slipped overnight, parring some of the losses later on, with the Bloomberg US Dollar Index Spot up 0.02 percent at 1355 Amman Time, from a low of 103.17.
The Bloomberg dollar index spot stood at 103.2240, down from a day’s high of 103.32 and on its way to its lowest level in three months.
A weaker US dollar usually boosts oil demand in a balanced market. But with supply apparently outweighing demand, a slight decline in the dollar will do little to raise oil prices.
