Oil prices continued to rise for the fourth consecutive session during Tuesday’s trading, supported by indications of improved demand for crude and the return of economic activity in China.
By 0629 GMT, Brent crude was up 25 cents, or 0.7 percent, at $ 35.06 a barrel, after touching earlier its highest levels since April 9.
US West Texas Intermediate crude increased 43 cents, or 1.4 percent, to $ 32.25 a barrel. The price had risen to $ 33.44 earlier in the session, peaking since March 16.
The June contract for West Texas crude is due today, but there is little sign of a repeat of the unprecedented decline to below zero, which occurred a month ago, on the eve of the deadline for the May contract, amid signs of improved demand for crude and fuel.
The market was earlier supported by indications of the implementation of production cuts agreed by the Organization of Petroleum Exporting Countries (OPEC) and others, including Russia, in what is known as the OPEC + alliance.
OPEC + cut oil exports sharply in the first half of May, according to companies monitoring shipments, which foretells a strong start to comply with the new production cut deal.
“Investor sentiment has improved as OPEC + appears to be shrinking production as they promised this month, with more voluntary cuts expected in June,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
“At the same time, there is growing optimism that easing global global closures (due to the Corona virus) will help boost economic activity and fuel demand,” he added.
In the currency markets, the dollar suffered losses against the major currencies, on Tuesday, after encouraging results from experiments with a vaccine against the Corona virus, which improved sentiments and gave a positive boost to high-risk assets.
The euro maintained significant gains against the Swiss franc and the dollar, after a proposal by France and Germany for a 500 billion euro (543 million dollars) economic recovery fund to provide grants to regions most affected by the Corona virus crisis.
Currencies linked to primary commodities and other high-risk assets in general were supported, also benefiting from a strong recovery in oil prices as investors turned their attention back to recovering from the pandemic.
“There is a significant improvement in the appetite for risk thanks to hopes for a vaccine,” said Junichi Ishikawa, chief foreign exchange strategist at IG Securities in Tokyo.
“Volatility is ebbing in stocks and dollar financing costs are falling. It is easy for the dollar to fall and other currencies can take advantage of dollar losses and rise.”
The euro hit 1.0913 dollars today, after rising 0.9 percent against the dollar in the previous session.
The single currency hit 1.0613 Swiss francs, after yesterday, Monday, it jumped to its highest level in more than two months.
The euro’s rise came last night after France and Germany proposed that the European Commission borrow on behalf of the European Union as a whole for the Economic Recovery Fund.
The pound also benefited from the dollar’s losses and rose to $ 1.2204, but traders are preparing for the British jobs data due later in the day.
The dollar was little changed, at 107.39 yen.
The yuan settled at $ 7.1090 on the domestic market. And investors in the dual currency are still concerned about the heightened tensions between the United States and China over trade policy and criticism directed at China’s handling of the Corona crisis.