Oil prices surged today, helped by the tumbling US dollar following comments by a US Federal Reserve official and weak economic data.
Brent crude, the international benchmark, rose 8.31 per cent to $35.44 per barrel. Meanwhile, West Texas Intermediate (WTI) crude, added 9.3 per cent to $32.66.
"We're getting the rally in crude oil from the pounding that the dollar is taking," said Robert Yawger, senior vice president of energy futures at Mizuho Securities USA. The weak dollar effectively makes it cheaper to buy oil using foreign currencies.
William Dudley, president of the Federal Reserve Bank of New York, told MNI that rate-setters could have to account for considerably tighter financial conditions if the phenomenon persists. It came after a disappointing services sector data, and together they weighed on the dollar.
Oil prices had already rebounded from $30 per barrel earlier today, after a Russian official reignited hopes that it could agree a production cut deal with the Organization of the Petroleum Exporting Countries (Opec).
Russian foreign minister, Sergei Lavrov, said if there's consenus among Opec and non-Opec members to meet, "then we will meet".
His comments put the black stuff on course to end two consecutive days of decline, which had been sparked by fading optimism over a prospective deal to cut supply.
"Is there going to be a meeting between Russia and Opec? That is a supportive factor in this rally that we've seen in the last hour," Tamas Varga, analyst at PVM Oil Associates, said.