Oil prices increased by more than 5% yesterday, as a lower dollar and buoyant global equity markets lifted oil futures after seven days of falls.
Brent crude rose $3.64, or 5.6%, to $68.82 a barrel after falling to its lowest level since May of this year at $64.60 during the session. West Texas Intermediate (WTI) crude for October delivery in the United States climbed $3.61, or 5.8 per cent, to $65.75.
Last week, both benchmarks had their worst week of losses in more than nine months, with Brent falling roughly 8% and WTI falling about 9%.
However, a fall in the value of the US dollar offered a lift, making oil less expensive for holders of foreign 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 U.S. dollar indices represents a potent mix that oil has been forced to recognize,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
The dollar index, which measures the currency against six rivals, was down 0.4 per cent after reaching a nine-month high on Friday.
The MSCI world market index, which measures stocks in 50 nations, was up after experiencing its largest weekly drop since June the previous week. Nonetheless, many countries are enacting new travel restrictions in response to the increased coronavirus infection rate.
“We expect to see more adjustments this week, but the market sentiment will likely remain bearish, with growing concerns over slower fuel demand worldwide,” said Kazuhiko Saito, chief analyst at Fujitomi Securities.
Recall that, The naira lost some of its recent gains versus the dollar on the parallel market on Wednesday, owing to the country’s continued scarcity of the greenback. On the parallel market, the local currency slipped to 515 per dollar from 510 on Tuesday.