Oil prices rise on softer U.S. dollar, supply woes By Reuters

By Isabel Kua

SINGAPORE (Reuters) -Oil prices climbed on Tuesday, bolstered by a weaker U.S. dollar and supply woes, although gains were capped by the spectre of lower fuel demand from China as it persists with its stringent zero-COVID policy.

futures rose 74 cents, or 0.8%, to $92.36 per barrel by 0505 GMT, while U.S. West Texas Intermediate (WTI) crude futures gained 78 cents, or 0.9%, to $86.24 per barrel.

The – which measures the greenback against six major peers including sterling – sagged near a one and a half week low as Britain’s dramatic U-turn over a controversial tax-slashing “mini-budget” lifted risk appetite. A weaker dollar makes oil cheaper for non-U.S. buyers.[FRX/]

Following the steep production cut agreed on by OPEC+ – the Organization of the Production Exporting Countries (OPEC) and its allies, including Russia – earlier this month, investors have been seen increasing their long positions in futures, ANZ Research analysts said in a note.

OPEC+ member states have been lining up to endorse the cut to the output target after the White House accused Riyadh of coercing some other nations into supporting the move.

Meanwhile, expectations that China will keep with loose monetary policy to help its economy, hobbled by COVID-19 restrictions, lent some support to oil prices. The country’s central bank rolled over maturing medium-term policy loans on Monday while keeping its key interest rate unchanged for a second month.

However, China’s fuel demand outlook weighed on sentiment after the world’s top crude oil importer delayed the release of its economic indicators, originally scheduled to be out on Tuesday, CMC Markets analyst Tina Teng said. No date for a rescheduled release has been given.

China’s adherence to its zero-COVID policy has continued to increase the uncertainties about the country’s economic growth, Teng added.

On the supply side, oil stocks were expected to have risen for a second consecutive week and are estimated to have increased by 1.6 million barrels in the week to Oct. 14, a preliminary Reuters poll showed on Monday.

Output in the Permian Basin of Texas and New Mexico, the biggest U.S. shale oil basin, is forecast to rise by about 50,000 barrels per day (bpd) to a record 5.453 million bpd this month, the Energy Information Administration said.