Oil prices gain as investors shift to risk assets amid dollar slide
Oil prices gained in early trade on Tuesday, recovering overnight losses, as investors turned to risky assets and away from the safe-haven dollar, which fell to more than a two-year low.
Brent crude futures rose 0.6%, or 27 cents, at $45.55 per barrel. U.S. West Texas Intermediate crude futures climbed 0.5%, or 21 cents, at $42.82 per barrel.
Both benchmarks fell 1% on Monday on oversupply worries as global fuel demand remained below pre-pandemic levels.
The U.S. dollar was last down 0.04% to 92.146 against a basket of currencies after it fell to its lowest in May 2018. The greenback continued its plunge as the U.S. Federal Reserve announced a policy shift on inflation last week.
A weak U.S. dollar attracted investors into dollar-priced oil and other commodities.
Still, the market is focused on the stalled fuel demand recovery as countries worldwide worked on containing the virus with lockdowns and social restrictions.
Analysts expect U.S. crude stocks dropped by 2 million barrels in the week ended Aug. 28 ahead of the release of U.S. inventories data.
Gasoline inventories are expected to fall by 3.6 million barrels. Distillate stocks, including diesel and heating oil, are expected to decline by 1.5 million barrels.