Oil Futures Cut Early Losses, Settle Notably Higher Ahead Of Inventory Data

Crude oil futures settled higher on Tuesday, buoyed by a weaker dollar, and amid concerns about supply after Saudi Arabia’s energy minister commented that energy stocks were being used as a mechanism to manipulate markets.

Oil prices slipped more than 1% earlier in the session amid concerns about the outlook for global demand, particularly in China.

Data released over the weekend showed demand from the world’s largest crude importer remained lackluster in September as a result of strict COVID-19 policy that has crimped business and trade.

The data showed China’s crude oil imports in September were 2% lower than a year earlier, while business activity contracted in the euro zone, the United Kingdom and the United States in October.

The dollar declined by more than 1% amid hopes the Fed might consider slowing down the pace of interest rate hikes when it meets next week, and this helped boost the demand for crude.

West Texas Intermediate Crude futures for December ended higher by $0.74 or about 0.9% at $85.32 a barrel. The contract rallied to $86.03 a barrel from a low of $83.06.

Brent crude futures climbed to $92.48 a barrel earlier in the day but gave up most of its gains as the session progressed.

The head of the International Energy Agency (IEA), Faith Birol, said that tightening markets for liquefied natural gas worldwide and supply cuts by major oil producers have put the world in the middle of “the first truly global energy crisis.”

Traders now look ahead to weekly oil reports from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA).

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