There has been a 3% increase in oil prices after the dollar value weakened following the US Federal Reserve’s announcement that interest rates would remain unchanged.
Brent price increased $1.44 to reach at $47.18, while US crude’s West Texas Intermediate’s front-month contract was up $1.29% to reach $45.33 a barrel, reported Reuters.
The Fed had stated that it was not changing interest rates and also indicated that it was not in a hurry to increase the rates.
With dollar value declining, oil and other commodities denominated in the dollars become affordable for buyers holding other currencies.
Brent has increased by more than $20 a barrel, almost 75%, after reaching 12-year lows in the first month of this year.
In April, it grew by 19%, which is its largest monthly increase so far this year.
Tyche Capital Advisors trader and portfolio manager Tariq Zahir said: "With crude inventories building and the Saudis still pumping at record levels, we feel the recent run-up has been mainly fuelled by the weakness on the dollar."
Two weeks ago, the possibility of a production freeze among oil producing nations collapsed after OPEC and Russia could not reach an agreement in a meeting held in Doha, Qatar.