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.
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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.
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By GlobalDataHowever, 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.”
