Prises
Melbourne, Sept. 1, 2020 Oil prices recovered on Tuesday, erasing overnight losses, as investors moved into risk assets and away from the safe-haven United States dollar, which tumbled to multi-year lows.
Brent crude futures climbed 49 cents or 1.1 per cent to $45.77 a barrel at 0406 GMT.
The United States West Texas Intermediate (WTI) crude futures rose 37 cents or 0.9 per cent to $42.98 a barrel.
Both benchmark contracts fell around one per cent on Monday on worries about oil oversupply, with global demand stuck below pre-COVID levels.
The United States dollar was last down 0.04 per cent at 92.146 against a basket of currencies, after hitting its lowest since May 2018 in the wake of the United States Federal Reserve’s policy shift on inflation announced last week.
“It (the policy shift) really cements the fact that you’re looking at negative real rates for the United States which will not be great for the United States dollar.
“That’s good for commodities,’’ said Louis Crous, Chief Investment Officer at BetaShares, an Australian exchange-traded funds provider.
The weakening United States dollar makes oil and other commodities priced in dollars more attractive to global buyers.
Overall, the market remains focused on the stalled recovery in fuel demand as countries continue to battle the coronavirus pandemic with rolling COVID-19 lockdowns, analysts said.
“This has created plenty of uncertainty about whether demand for transportation fuels will ever return to normal,’’ ANZ Research said in a note.
Ahead of the release of United States stockpile data from the American Petroleum Institute industry group, a Reuters’ poll found analysts expect United States crude stocks fell by about two million barrels in the week to Aug. 28.
Gasoline inventories are seen falling by 3.6 million barrels, while distillate inventories, which include diesel and heating oil, are expected to drop by 1.5 million barrels, six analysts polled by Reuters estimated.
Edited By: Abdulfatah Babatunde (NAN)
