WTI Crude Oil in Demand as US Dollar Weakens
WTI crude oil prices have had a bullish start to the day on Tuesday, supported by a weakness in the US dollar which shares a negative correlation with oil and has made it more attractive for holders of other currencies to purchase. At the time of writing, WTI crude oil is trading at around $59.16 per barrel.
After strengthening against most of its major rivals over the past several session, the US dollar retreated from several months’ high on Monday following a dip in the benchmark 10-year US Treasury yields. This made crude oil more attractive to purchase for nations whose exchange rate against the dollar strengthened as a result.
Over the previous session, WTI oil lost more than 4% of its value as markets were concerned about OPEC+ countries easing their severe supply cuts in the coming months. As per the decision taken in the latest meeting held late last week, OPEC and its allies are set to increase crude production by over 2 million bpd by July.
Crude oil prices also received some support over optimism that the UK is planning to ease its restrictions by next week after bringing the latest wave of the pandemic under control. This has raised hopes among traders that oil demand could improve as economic activity resumes across the fifth largest economy in the world.
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