ANKARA
Oil prices rose on Monday as the value of the US dollar fell, making dollar-indexed crude oil more affordable to buyers, while China’s decision to keep interest rates unchanged for the second month raised hopes for stronger demand in the world’s second-largest oil consumer.
International benchmark Brent crude traded at $92.62 per barrel at 10.16 a.m. local time (0716 GMT) for a 1.08% gain from the closing price of $91.63 a barrel in the previous trading session.
American benchmark West Texas Intermediate (WTI), trading at $85.47 per barrel at the same time, increased 0.97% after the previous session closed at $84.65 a barrel.
The US dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, fell 0.23% to 112.95 early Monday.
The decline in the value of the greenback is encouraging oil-importing countries to purchase more crude oil at cheaper dollar prices in support of higher crude prices.
Meanwhile, the People’s Bank of China (PBOC) announced it would maintain the interest rate on 500 billion yuan ($99.2 billion) in medium-term lending facility loans to selected financial institutions at 2.75%, unchanged from the previous transaction.
According to experts, the country’s loose monetary policy and supportive policies toward the energy sector have increased expectations of a demand rebound.
The decision by the oil producer group OPEC+ to cut production by 2 million barrels per day (bpd) has heightened concerns about a lack of supply, affecting prices and raising volatility ahead of EU sanctions on Russian oil.
OPEC+ members, including the United Arab Emirates (UAE), Oman, and Algeria voiced their support for the move to reduce output by 2 million bpd despite strong criticism of the UAE from the US.
Under the sixth set of sanctions, EU leaders decided in early July to cut Russian oil imports by 90% by the end of the year.
The strategy calls for phasing out Russian crude oil shipments by Dec. 5 and refined product deliveries by Feb. 5.
