Softer dollar, cuts in US Gulf supplies boost oil prices

With supply curbs in the United States Gulf of Mexico ahead of Hurricane Ian, and a slight softening in the dollar on Tuesday, oil rose more than 1% from a nine-month low on Monday.

Additionally, analyst expectations that OPEC+ would cut supply in order to stem the price decline also supported the market. On Oct. 5, OPEC+ meets to set policy.

“Oil is currently under the influence of financial forces,” said Tamas Varga of oil broker PVM. “In the meantime, relief rallies, like the one this morning caused by Hurricane Ian in the U.S. Gulf, are viewed as temporary phenomena.”

Brent crude rose $1.11, or 1.3 percent, to $85.17 a barrel by 0810 GMT. On Monday it fell as low as $83.65, the lowest since January. U.S. West Texas Intermediate (WTI) crude was up $1.08, or 1.4 percent, at $77.79.

There was some support from the lull in the strength of the U.S. dollar, which earlier hit a 20-year high. Risk assets tend to suffer when the dollar rises because buyers using other currencies find crude to be more expensive.

27 September 2022