Oil up over slumping dollar ahead of US Fed meeting

Oil prices opened with gains on Tuesday, having recovered from declines from the previous trading session as the much-anticipated US Federal Reserve meeting led to a weaker US dollar.

International benchmark Brent crude traded at $94.19 per barrel at 9.23 a.m. local time (0623 GMT) for a 1.48% increase from the closing price of $92.81 a barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI) traded at $87.78 per barrel at the same time for a 1.44% gain after the previous session closed at $86.53 a barrel.

Prices fell at the start of the week due to bleak industrial statistics from China, but they soon recovered as the value of the US dollar declined and importers could purchase dollar-indexed crude oil at lower prices.

The expectation of an interest rate rise by 75 basis points at the upcoming US Federal Reserve’s meeting on Wednesday triggered a fall in the US dollar rate.

The US dollar index, which includes a basket of currencies like the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, was down 0.46% at 0651 GMT.

Taking the wind out of rising oil prices, industrial data in the world’s second-largest, oil-consuming country, China, signaled weakening demand and negatively reflected on oil prices.

China’s official manufacturing Purchasing Managers’ Index (PMI) decreased from 50.1 in September to 49.2 in October.

The official non-manufacturing PMI, which measures business confidence in the construction and services sectors, also showed a fall from 50.6 in September to 48.7 in October.

China’s ‘Zero-COVID’ policy, which continues to impose restrictions, is a major contributor to the country’s deteriorating economy.

• Oil Prices