Global crude oil prices increased due to a drop in the US dollar, outweighing concerns on the Organization of the Petroleum Exporting Countries and allies (OPEC+) oil supply agreement.
Brent crude futures rose by $0.83, or 1.3%, to reach $62.98 a barrel while the US West Texas Intermediate (WTI) crude futures increased $0.80, or 1.4%, to $59.45 barrel, reported Reuters.
CMC Markets and Stockbroking chief market strategist Michael McCarthy said: “The weaker US dollar is a contributor, and increasing (US) growth confidence helps.”
The weaker US dollar also helped in easing concerns about the agreement signed by the OPEC+ last week.
Under the agreement, the OPEC+ will add 350,000 barrels per day (bpd) of oil to the fuel market in May. It will also add another 350,000bpd in June and a further 400,000bpd in July.
Additionally, Saudi Arabia said it would phase out its extra voluntary cut of one million barrels per day from May to July.
However, after being exempted from making voluntary cuts, OPEC member Iran is boosting oil production.
The OPEC+ agreed to add supply to the market despite concerns over surging Covid-19 cases.
ANZ Research was cited by the news agency as saying: “Rising virus cases in countries such as India and the European Union are keeping traders cautious, with any renewed restrictions likely to weigh on demand.”