Oil up over 2% on dollar stumble, demand pre-U.S. inventory report
Investing.com — The push and pull in crude prices continues with Tuesday’s rally triggered by the dollar’s drop to two-month lows and optimism ahead of the U.S. government’s weekly oil consumption-supply report.
“It’s the normal summer demand for fuels, exacerbated somewhat by the rhetoric of producers vowing to cut output to make supply even tighter than normal at this time of year,” said John Kilduff, partner at New York energy hedge fund Again Capital.
“On top of that, you have the dollar’s collapse making oil an even more attractive buy. Thus, the market volatility where one day it drops on rate hike fears and the next day it jumps on demand/dollar boost.”
New York-based West Texas Intermediate, or WTI, crude settled up $1.84, or 2.5%, at $74.83 per barrel. In the prior session, it slid 1.2% after last week’s gain of 4.6%.
London-based Brent finished the U.S. trading session up $1.71, or 2.2%, at $79.40, after Monday’s 1% slide that came after last week’s 4.8% rally.
The Dollar Index, which pits the U.S. dollar against six major currencies, fell to 101.34, its lowest since the first week of May. A weaker dollar makes commodities priced in the greenback, such as oil, more attractive to buyers using other currencies.
The dollar tumbled after several Federal Reserve officials said on Monday the central bank would likely need to raise interest rates further to bring down inflation but the end to its current monetary policy tightening cycle was getting close.
The rally in crude also came ahead of Wednesday’s release of the Consumer Price Index, or CPI, report for June, which economists said was likely to have grown 3.1% on the year.
Inflation, as measured by the CPI, hit 40-year highs in June 2022, expanding at an
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