Investing.com - Crude oil futures shook off earlier weakness to climb to a two-week high during U.S. morning hours on Tuesday, as the dollar index moderated earlier gains and entered negative territory while some technical buying also provided support.
On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD93.18 a barrel during U.S. morning trade, up 1.2% on the day.
New York-traded oil prices rose by as much as 1.5% earlier in the day to hit a session high of USD93.43 a barrel, the strongest level since February 25.
Tuesday’s turnaround coincided with the euro erasing its losses against the U.S. dollar, while the dollar index declined 0.1% to trade at 82.73, erasing an earlier advance of as much as 0.3%.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
Oil prices found additional support as a bout of technical buying kicked in after prices broke above a key resistance level close to the USD92.20-level, triggering automatic buy orders amid bullish chart signals.
Indications the U.S. economic recovery was gaining momentum also provided support following the release of upbeat employment data on Friday.
Investors were looking ahead to U.S. data on retail sales on Wednesday to determine the durability of the economic recovery.
Oil traders also awaited fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 2.3 million barrels.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Oil prices were lower earlier in the day as concerns over the global economic outlook remained after Chinese data released over the weekend showed consumer inflation accelerated sharply in February, while industrial production slowed to the lowest level since October 2009.
Higher-than-expected inflation could raise concerns that Beijing will start monetary tightening.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery rose 0.65% to trade at USD110.41 a barrel, with spread between the Brent and crude contracts standing at USD17.23 a barrel, the lowest since late-January.
Brent’s gains were limited after a pipeline system used to transport North Sea oil resumed operation following a five-day halt last week.
The likelihood of a resumption in exports from South Sudan also kept a lid on gains. The move could unlock at least 350,000 barrels-a-day of oil exports.