Oil Rises Most in Two Weeks as Dollar Weakens and Equities Rise

LAGOS (Capital Markets in Africa) – Crude climbed by the most in more than two weeks amid a weaker dollar and easing concern that a trade war will break out between the U.S. and China.

Futures jumped as much as 1.6 percent in New York as the dollar dipped, boosting oil’s appeal as a store of value. As investors evaluate the ongoing tensions between U.S. and China, President Donald Trump predicted the Asian nation will be first to buckle amid an escalating trade dispute between the world’s two largest economies. U.S. equities climbed.

“We’ve got the U.S. dollar taking a bit of a correction,” said Bart Melek, head of global commodity strategy at TD Securities in Toronto. At the same time, “I get the feeling that the narrative is going to shift here with the trade situation, where I think people are trying to walk back some of the more aggressive rhetoric that we’ve seen.”

The U.S. benchmark crude has traded near $63 a barrel this month amid worries over tensions between the U.S. and China. At the same time, OPEC continues to cut output while production in the U.S. hits new weekly records.

West Texas Intermediate for May delivery climbed 83 cents to $62.89 at 9:40 a.m. on the New York Mercantile Exchange. Total volume traded was about 8 percent above the 100-day average.

Brent for June settlement added 90 cents to $68.01 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $5.12 premium to June WTI.

The Bloomberg Dollar Spot Index declined for a second session, bolstering the appeal of commodities traded in the U.S. currency, such as oil.

Other oil-market news:

• Gasoline futures rose 0.5 percent to $1.9648 a gallon on Monday.
• Saudi Arabia signalled its intent to expand chemical production along the U.S. Gulf Coast and potentially double the size of North America’s biggest oil refinery.
• Canada’s oil-sands industry suffered a major blow as Kinder Morgan Inc. halted most work on the Trans Mountain pipeline expansion.

Source: Bloomberg Business News