By Shariq Khan
NEW YORK (Reuters) – Oil prices rose a dollar a barrel on Tuesday, as the U.S. dollar index fell to its lowest level in more than a week and as investors shifted their focus away from geopolitical issues in the Middle East for the state of global economies.
Brent crude futures rose $1.42, or 1.6%, to $88.42 a barrel, while West Texas Intermediate (WTI) crude futures rose $1.46, or 1.8%, to $83.36 a barrel.
The U.S. dollar index weakened after data from S&P Global showed that business activity in the United States cooled to a four-month low in April due to weaker demand. A cheaper dollar typically increases demand for dollar-denominated oil from investors who hold other currencies.
Euro zone data that pointed to business activity expanding this month at the fastest pace in almost a year added further support to prices.
“The market has been under pressure due to little or no growth outside the eurozone, so anything that shows improvement should be favorable,” said Andrew Lipow, president of Lipow Oil Associates.
Market participants are looking beyond geopolitical disruptions to focus on economic indicators and global supply and demand balances, Lipow added.
“On the one hand, there are still doubts about the performance of China’s economy, while on the other hand, there is a prevailing feeling that OPEC will stick to its price support actions,” said Gaurav Sharma, an independent oil analyst. In London.
Investors await the release later this week of US gross domestic product (GDP) data for the first quarter, as well as March figures for personal consumption expenditures, the Fed’s preferred inflation indicator.
U.S. crude oil inventories were expected to have risen last week, while refined product inventories likely fell, a preliminary Reuters poll of analysts showed.
(Reporting by Shariq Khan in New York, Deep Vakil in Bengaluru, Mohi Narayan in New Delhi)
