Oil prices rose greater than 5 percent on Monday, as a weaker dollar and robust international equities markets boosted crude futures after seven days of declines.
Brent crude climbed $3.64, or 5.6 percent, to $68.82 a barrel after touching its lowest since May 21 at $64.60 in the course of the session.
U.S. West Texas Intermediate (WTI) crude for October supply rose $3.61, or 5.8 percent, to $65.75.
Both benchmarks marked their greatest week of losses in additional than 9 months final week, with Brent sliding about 8 percent and WTI about 9 percent.
But a drop within the US dollar supplied a lift on Monday, making crude cheaper for holders of different currencies.
“Although the oil complex has generally been able to shrug off strength in the stock market, the bullish combo of increased risk appetite and significant weakening in the US dollar indices represents a potent mix that oil has been forced to recognize” mentioned Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill.
The dollar index, which measures the foreign money in opposition to six friends, was down 0.4 percent after hitting its highest in additional than 9 months on Friday.
The MSCI world fairness index, which tracks shares in 50 international locations, was up, after having its greatest weekly fall since June final week.
Still, many countries are responding to the rising coronavirus an infection rate by introducing new journey restrictions.
“We expect to see more adjustments this week, but the market sentiment will likely remain bearish, with growing concerns over slower fuel demand worldwide,” mentioned Kazuhiko Saito, chief analyst at Fujitomi Securities.
China, the world’s largest oil importer, has imposed new restrictions, which is affecting delivery and international provide chains. The US and China have additionally imposed restrictions on flight capability.
While the pandemic drags on gasoline demand, provide is steadily rising. US manufacturing rose and drilling corporations added rigs for the third week in a row, companies company Baker Hughes mentioned.
“We anticipate that benchmark oil prices will remain, for now, stuck in a period of trendless rangebound volatility,” RBC Capital Markets analysts mentioned in a observe.
“Market participants may be compelled to buy the dip, but risk is not being forced and conviction levels remain low given the lack of visibility to near-term upside catalysts”
Investors have been additionally adjusting their positions earlier than the US Federal Reserve‘s annual Jackson Hole symposium in Wyoming on Friday.
“While the virus remains a threat to the short-term demand outlook, despite signs of an improving situation in China, this week’s Jackson Hole summit may give the market some ideas about the timing of tapering,” mentioned Ole Hansen, Saxo Bank’s head of commodity technique, referring to an anticipated discount in financial stimulus for the economic system.