Investing.com - West Texas Intermediate oil futures rallied sharply on Thursday, as a broadly weaker U.S. dollar lured investors back to the market.
On the New York Mercantile Exchange, crude oil for delivery in March rose by as much as $2.55, or 4.96%, to hit a daily high of $51.39 a barrel, before trading at $51.03 during U.S. morning hours, up $2.19, or 4.48%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.7% to 94.49, following the release of disappointing U.S. retail sales and jobless claims data.
A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.
On Wednesday, New York-traded oil futures plunged $1.18, or 2.36%, to end at $48.84 after data showed that oil supplies in the U.S. rose to the highest level on record last week, exacerbating fears over a glut in supplies.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for April delivery tacked on $1.86, or 3.86%, to trade at $57.79 a barrel, after rising by as much as $2.25, or 2.4%, to touch a session high of $58.17, as investors cheered reports of a cease-fire agreement between Russia and Ukraine.
Russian President Vladimir Putin confirmed that a cease fire deal with Ukraine starting February 15 had been reached, following months of violence.
The leaders of France and Germany helped broker the deal after nearly 12 hours of all-night peace talks.
A day earlier, London-traded Brent tumbled $1.57, or 2.73%, to settle at $55.92.
Oil prices have fallen sharply in recent months as the Organization of Petroleum Exporting Countries resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.
Market sentiment remained subdued after talks between Greece and European Union officials ended without an agreement, though both sides said there was still hope for a deal. Further talks are due to be held next Monday.
Greece’s current bailout is due to expire on February 28 and the new Greek government does not want it extended, fuelling fears over a conflict with its creditors which could trigger the country’s exit from the euro zone.
Athens has proposed an overhaul of 30% of its massive bailout deal, replacing it with a 10 point plan of economic reforms.
However, Greece’s creditors in the EU are insisting that the country must stick to the terms of the original bailout agreement.