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By Sonali Paul and Seng Li Peng
MELBOURNE/ SINGAPORE (Reuters) – Oil recovered Tuesday, erasing overnight losses when investors turned to declining assets and moved away from the US safe haven dollar, which fell to several-year lows.
Brent futures rose cents, or 1.1%, to $45.77 a barrel at 0406 GMT, while West Texas Intermediate (WTI) crude futures rose 37 cents, or 0.9%, to $42.98 a barrel.
The two reference contracts fell by about 1% on Monday due to considerations of oversupply of oil, with a global call to remain below pre-COVID levels.
The dollar dropped 0.04% to 92,146 against a basket of currencies, after touching its lowest level since May 2018 after the us Federal Reserve’s announced replacement in the US Federal Reserve’s inflation policy.UU.la last week.
“This (policy change) confirms the fact that it is looking for genuine negative rates for the US.But it’s not the first time They might not be smart for the US dollar.It’s smart for commodities,” said Louis Crous, BetaShares’ leading chief investment officer.publicly traded funds.
The weakening of the US dollar causes oil and other commodities to be valued more in dollars for global buyers.
Overall, the marketplace remains on the stalled recovery in fuel call for as countries continue to combat the coronavirus pandemic with continued COVID-19 lockdowns, analysts said.
“This has created a lot of uncertainty as to whether demand for transportation fuels will return to normal,” ANZ Research said in a note.
Prior to the knowledge of U.S. stocks by the American Petroleum Institute’s trading group, a Reuters vote found that analysts expected U.S. crude inventories to have fallen about 2 million barrels in the week leading up to August 28.
Gasoline inventories are expected to fall to 3.6 million barrels, while distillate inventories, which come with diesel and fuel oil, fall to 1.5 million barrels, according to six analysts surveyed through Reuters.
(Report through Sonali Paul and Seng Li Peng in Singapore; edited by Richard Pullin)