Oil prices moved up on Tuesday, reversing overnight losses against the backdrop of an equities bull run and a sliding U.S. dollar.
Brent crude futures gained 40 cents to $45.68 a barrel during morning trading. U.S. West Texas Intermediate (WTI) crude futures also grew by 40 cents, hitting $43.01 a barrel.
The dollar was at its lowest in more than two years against a basket of currencies .DXY, pressured by the U.S. Federal Reserve’s loosening of inflation policy last week, making dollar-priced commodities cheaper for global buyers.
Jeffrey Halley, a senior market analyst at OANDA noted that strong Chinese manufacturing data also lifted oil prices.
The Caixin/Markit Manufacturing Purchasing Managers’ Index(PMI) showed China’s factory activity grew at the fastest pace in nearly a decade last month, strengthened by the first increase in new export orders this year.
Bulls also pushed up equities, with the MSCI world equity index MIWD00000PUS close to a record peak on Tuesday.
Yet oil, which often moves in tandem with equities, remains reigned in by demand concerns.
PVM analyst Tamas Varga said oil prices are likely to move below recent levels, citing sizeable downward revisions to second-half demand estimates by the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC)
Frontpage September 29, 2020