WTI Crude Oil Still Bullish, But Gains Limited by Stronger Dollar

Early on Tuesday, WTI crude oil prices are climbing higher, supported by expectations that the US economy would recover faster after the Senate approved President Biden’s stimulus measures worth $1.9 trillion. At the time of writing, WTI crude oil is trading at around $65.46 per barrel.

Crude oil started this week on an extremely bullish footing over reports of attacks on Saudi oil facilities by Yemeni Houthi rebels. The fresh geopolitical tensions had raised fears of oil production being hampered in the Middle East, which could potentially tighten supply.

WTI oil prices received another boost after the next round of fiscal stimulus measures in the US moved one step closer to being implemented. In addition, economists expect US crude inventories and distillate stockpiles to have declined during the past week, which could lend more support to the bullish trend.

However, gains in crude oil remain limited on account of a strengthening in the US dollar, which makes it more expensive for holders of other currencies to buy oil. In addition, the geopolitical tensions in the Middle East are also receding, easing concerns of supply tightening.