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Oil prices rise on weaker dollar, supply worries

Published Oct 24, 2022 08:29PM ET Updated Oct 25, 2022 05:13PM ET
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2/2 © Reuters. FILE PHOTO: A pump is seen at a gas station in Manhattan, New York City, U.S., August 11, 2022. REUTERS/Andrew Kelly 2/2
 
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By Stephanie Kelly

NEW YORK (Reuters) -Oil prices edged higher on Tuesday, rebounding from an early fall of more than $1 a barrel, on a lift from a weaker dollar and supply concerns highlighted by Saudi Arabia's energy minister.

Brent crude futures rose 26 cents to settle at $93.52 per barrel, while U.S. West Texas Intermediate crude futures rose by 74 cents to $85.32.

Both benchmarks rose and fell by $1 during the session.

The U.S. dollar index fell during afternoon trade, making greenback-denominated oil less expensive for other currency holders and helping to push prices higher.

Further support came from comments by Saudi Arabia's Energy Mister Prince Abdulaziz bin Salman that energy stockpiles were being used as a mechanism to manipulate markets.

"It is my duty to make clear that losing emergency stocks may be painful in the months to come," he told the Future Initiative Investment (FII) conference in Riyadh.

Meanwhile, tightening markets for liquefied natural gas (LNG) worldwide and supply cuts by major oil producers have put the world in the middle of "the first truly global energy crisis," Fatih Birol, the head of the International Energy Agency (IEA), said.

The comments out of Riyadh and from the IEA are "a reminder that when it comes to the energy crisis, it's far from over," said Phil Flynn, an analyst at Price Futures Group. "There are still concerns the market is undersupplied."

Uncertain economic activity in the United States and China, the world's two biggest oil consumers, limited oil's gains, however.

On Monday, government data showed China's crude oil imports in September were 2% lower than a year earlier, while business activity contracted in the euro zone, Britain and the United States in October.

Goldman Sachs (NYSE:GS) Chief Executive David Solomon said that he believes a U.S. recession is "most likely," while a recession could be occurring in Europe.

The U.S. Federal Reserve could raise its benchmark overnight interest rate beyond the 4.50%-4.75% range if it does not see real changes in behavior, he said at the FII conference.

U.S. crude stocks rose by about 4.5 million barrels for the week ended Oct. 21, according to market sources citing American Petroleum Institute figures on Tuesday. Gasoline inventories fell by about 2.3 million barrels, while distillate stocks rose by about 600,000 barrels. [API/S]

U.S. government data on crude stockpiles is due on Wednesday.

Oil prices rise on weaker dollar, supply worries
 

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