Crude oil futures recovered after early weakness and ended sharply higher on Tuesday amid signs of tighter supplies in the global oil market.
The dollar’s continued weakness contributed as well to the sharp rise in oil prices. The dollar index dropped to 106.40 before regaining some ground. Still, at 106.70, the index was down more than 0.6% a little while ago.
Oil prices drifted lower earlier in the session on worries about the outlook for energy demand as new coronavirus cases in China jumped to almost 700 and data showed the eurozone’s inflation accelerated as estimated in June to set a fresh record high, raising worries about a possible recession.
West Texas Intermediate Crude oil futures for August ended higher by $1.62 or about 1.6% at $104.22 a barrel.
Brent crude futures were up $1.06 or about 1% at $107.33 a barrel.
U.S. President Joe Biden, who visited the Middle East recently, returned without getting assurances from key producer Saudi Arabia to boost oil supply.
Saudi’s foreign minister reportedly said that there was no discussion on oil at the U.S.-Arab summit and that OPEC+ would continue to assess market conditions and what is necessary.
Russian energy company Gazprom PAO told customers in Europe it cannot guarantee gas supplies because of “extraordinary” circumstances, according to a letter seen by Reuters.
Amid lingering concerns over gas supply from Russia, investors await U.S. crude supply data from the American Petroleum Institute later in the day for further direction.
The Energy Information Administration (EIA) will release its weekly inventory data on Wednesday morning.