US West Texas Intermediate and international benchmark Brent crude oil futures are trending higher on Tuesday as traders seek to reduce losses from the previous session. The price action suggests that traders are taking their cues from the US dollar.
Crude oil prices rose ahead of the session on Monday, before the US Senate approved a $ 1.9 trillion stimulus bill over the weekend, before a recovery in the global economy was expected. Fears of oil supplies from Saudi Arabia being disrupted following the attack on oil facilities also boosted prices at the beginning of the session.
An increase in Treasury yields on Monday pushed prices higher, dragging the US dollar and reducing demand for dollar-denominated crude oil. Prices also declined due to fears of supply disruptions in the Middle East.
Yemen’s Houthi Forces Fire Drone in Saudi Oil Infrastructure
On Monday, Brent crude oil prices rose above the psychological $ 70 per barrel level when Yemen’s Houthi army fired drones and missiles at the center of the Saudi oil industry, including petroleum exports to Saudi Tanco at Ras Tanura Important feature was included.
Authorities in Riyadh said that there have been no casualties and property prices have plummeted and days have reduced. Nevertheless, the United States expressed alarm over Yemen’s Iran-aligned Houthis and Saudi Arabia in the region over “real security threats”, and said it would see an improvement in support for Saudi security.
OPEC’s decision to maintain the level of current production cuts throughout April will continue to provide support for crude oil prices. This is not a catalytic support for a reverse breakout. Therefore, we expect buyers to keep coming to the dips until OPEC and its partners meet again in a month to decide the policy.
In addition, US Treasury Secretary Janet Yellen said Monday that President Joe Biden’s $ 1.9 trillion coronavirus aid package would provide sufficient resources for a “very strong” US economic recovery. If he is right, then demand to grow with him.
But will increasing prices actually increase prices? This is a good question. With trades priced higher than pre-epidemic levels, increased demand may already be priced in the market.
Meanwhile, later today, the American Petroleum Institute (API) will release figures for its latest inventions at 21:30 GMT. US crude and refined product reserves fell last week, with distillate inventories seen drawing for a fifth straight week, an early Reuters poll on Monday showed.