Oil Prices Up 1% as Dollar Weakens, Supply Halts in Focus

Oil prices edged higher in early Asian trade on Thursday, as slower-than-expected US inflation weakened the dollar, suggesting signs of improved fuel consumption in the world’s largest consumer nation.

Brent oil futures rose 0.72% to $76.96 a barrel, while West Texas Intermediate crude futures traded 0.70% higher at $73.07 a barrel by 10.47 A.M. Bangkok time.

Inflation in the United States cooled off in April, giving the Federal Reserve a chance to slow down its rapid monetary tightening. This weakens the US dollar, benefiting commodities priced in the currency.

Concerns over Fed tightening and a potential US recession have outweighed the lift from China’s resurgence since it abruptly abandoned Covid Zero in late 2022, resulting in a 9% decline in crude oil prices this year. Oil also benefited from a surprising cut in output by the Organization of Petroleum Exporting Countries and its allies and a US drive to replenish its strategic petroleum reserves.