Oil prices reduced earlier declines to increase during trading on Tuesday, supported by a weaker U.S. dollar, although increases were limited as worries grew about a possible U.S. recession and the effects of tariffs on worldwide economic growth. Investors are keeping a close eye on OPEC+ plans, as the producer group is expected to begin supplying its initial barrels to the market in April while looking for additional clarity on their strategy. Brent futures increased by 47 cents, or 0.68 per cent, reaching $69.75 a barrel at 0936 GMT following a decline in early trading. U.S. West Texas Intermediate crude futures rose by 42 cents, or 0.64 per cent, to $66.45 a barrel following earlier drops as well.
Oil Prices Recover Slightly
The dollar index (.DXY) reached a four-month low, causing oil to become cheaper for international purchasers. Both indexes ended the previous session down by 1.5 per cent. Reducing or eliminating punitive actions will alleviate concerns about economic downturn or inflation and stop the decline in the stock market, particularly if paired with a mutually agreeable peace agreement between Ukraine and Russia, according to PVM analyst Tamas Varga. "As a result, oil prices would stabilize, although the present drop makes it difficult to envision OPEC+ proceeding with its strategy of reintroducing oil to the market from April," Varga stated.
On Friday, Alexander Novak, Russia's Deputy Prime Minister, informed reporters that the OPEC+ producer group will proceed with its increase planned for April but might subsequently contemplate additional measures, such as decreasing production. Despite the market fluctuations, Brent priced near $70 a barrel serves as solid support, and oil prices could attempt a technical rebound at these levels, stated Suvro Sarkar, head of the energy sector team at DBS Bank, noting that the OPEC+ supply strategy will remain adaptable based on market dynamics.
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Investors are now anticipating important U.S. inflation figures set to be released on Wednesday to assess the Central Bank's position on interest rates. In the U.S., it was anticipated that crude oil stocks increased last week, whereas distillate and gasoline supplies probably decreased, a preliminary Reuters survey indicated on Monday. The survey took place prior to the updates from the American Petroleum Institute at 4:30 p.m. EDT Tuesday and the Energy Information Administration at 10:30 in the morning.
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