Investing.com -- Crude futures rose to fresh 1-month highs on Tuesday, ahead of the American Petroleum Institute's weekly inventory report, as investors continued to weigh the possibility that discussions between leading OPEC producers at an energy forum next could help stabilize global oil prices.
On the New York Mercantile Exchange, WTI crude for September delivery traded between $45.34 and $46.61 a barrel before closing at $46.58, up 0.83 or 1.84% on the session. Since dipping below $40 a barrel earlier this month, WTI crude has rallied more than 17% over the last two weeks. On the Intercontinental Exchange (ICE), brent crude for October delivery wavered between $47.90 and $49.33 a barrel, before settling at $49.32, up 0.95 or 1.95% on the day. At session-highs, brent futures reached their highest level since July 7.
Crude prices remained at their highest level in more than a month on Tuesday, as market players continued to digest market moving comments from Russia energy minister Alexander Novak in the previous session. On Monday, Novak told Saudi Arabia state-owned newspaper Asharq al-Awsat that dialogue with the Saudi kingdom regarding a possible deal aimed at achieving long-term oil market stability has progressed in "a tangible way." In late-September, OPEC leaders and other top producers are scheduled to meet on the sidelines of the 15th International Energy Forum in Algeria. While investors have expressed skepticism that the negotiations could lead to an immediate production freeze, oil prices have soared since reports of the informal talks surfaced last week.
OPEC leaders have not convened since the 14-member cartel left its production ceiling above 30 million barrels per day at its semi-annual meeting in June. Weeks earlier, negotiations involving a Saudi-Russian coordinated production freeze collapsed in Doha after Saudi Arabia insisted that main rival Iran take part in any agreement that required the participants to cap output at levels from early-2016. Iran, which has resisted any deal to freeze its production until daily output reaches between 4 million and 4.2 million bpd, told the Wall Street Journal on Tuesday that it is unlikely to hit the target by the start of the meeting in Algeria.
Elsewhere, energy traders await the release of the API's weekly crude stockpile report on Tuesday evening for further indications on the supply-demand balance in oil markets throughout the U.S. Separately, Wednesday's government report from the U.S. Energy Information Administration (EIA) could show that U.S. crude inventories fell by 333,000 barrels for the week ending on August 12. A week earlier, crude stockpiles increased by 1.1 million barrels, while gasoline inventories fell sharply by 2.8 million barrels. While gasoline inventories have fallen considerably in each of the last two EIA weekly reports, stockpiles in the PADD 1 region, which comprises the majority of the U.S. east coast, remain near record-highs.
Crude prices remained supported on Tuesday by a weak dollar. The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, crashed by more than 0.90% to an intraday low of 94.38, its lowest level since June 27. Since hitting a four-month high at 97.62 in late-July, the Dollar has retreated by more than 2%.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.