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Oil prices rose a dollar a barrel on Tuesday, April 23, as the US dollar index fell to its lowest in over a week and as oil investors shifted focus away from the ongoing geopolitical issues in the Middle East to the state of global economies. The US dollar index weakened after latest S&P Global data showed US business activity cooled in April to a four-month low on a weaker demand.
Brent crude futures rose $1.29, or 1.5 per cent, to $88.29 a barrel. US West Texas Intermediate crude futures rose $1.32, or 1.6%, to $83.22 a barrel., according to news agency Reuters. Coming to domestic prices, crude oil futures rose 1.35 per cent to ₹6,926 per barrel on the multi commodity futures (MCX).
What’s driving crude oil prices?
-A cheaper greenback typically lifts demand for dollar-denominated oil from investors holding other currencies. Both crude oil contracts had dropped by more than a dollar early in the session on easing tensions between Israel and Iran, along with nagging concerns on demand from top oil importer China.
-More support for prices came from Euro Zone data that showed business activity expanding at the fastest pace in nearly a year this month. Analysts said that the market has been under pressure from little to no growth out of the Euro Zone, so anything showing improvement should be supportive.
-Investors are awaiting US gross domestic product figures and March personal consumption expenditure data, the Fed’s preferred inflation gauge. A low GDP number of under three per cent could cool the Fed’s nerves some and provide less pressure to commodities. A stronger than three per cent reading could cause the dollar to rally, which would put more pressure on commodities.
more to come
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Published: 23 Apr 2024, 11:06 PM IST
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