Oil price rises on weaker dollar, Saudi commitment to cut output

Gains were also capped due to rising US production

Oil prices rose on Tuesday, supported by a falling US dollar and Saudi Arabia saying it would adhere to Organisation of the Petroleum Exporting Countries (Opec)’s commitment to cut output.

The dollar fell by 0.6 percent against a basket of currencies on Tuesday after US President-elect Donald Trump said the strong greenback was hurting US competitiveness. Brent crude futures, the international benchmark for oil prices, were up 76 cents at $56.52 a barrel by 14:51 GMT, having risen earlier by more than $1 to a session high of $56.95 a barrel.

US West Texas Intermediate (WTI) crude futures were up by 82 cents at $53.19 a barrel. The contract also rose more than $1 to a session high of $53.52 a barrel. “The rise is more or less related to the weaker dollar, which has lifted most commodities today (Tuesday),” said Carsten Fritsch, commodity analyst at Commerzbank.

Gains were capped by rising US production and scepticism that Opec as a whole would comply with its commitment to reduce supplies.

Traders said oil drew some support from top crude exporter Saudi Arabia, which said it would adhere strictly to its commitment to cut output under the agreement between Opec and other producers, such as Russia.

Reuters