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By Sonali Paul and Seng Li Peng
MELBOURNE / SINGAPORE (Reuters) – Oil rallied on Tuesday, erasing overnight losses as investors turned to declining assets and turned away from the safe-haven US dollar, which fell to multi-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 fell 0.04% to 92,146 against a basket of coins, after touching its lowest level since May 2018 following the US Federal Reserve’s replacement policy.But it’s not the first time About the inflation announced 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 weakest U.S. dollar causes oil and other commodities to be valued more in dollars for global buyers.
Overall, the market remains in stagnant recovery in fuel demand as countries continue to fight the coronavirus pandemic with progressive COVID-19 blockages, 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)