Crude oil prices surged in European trade on Tuesday after plunging a day earlier, as a steeply lower dollar bolstered the appeal of dollar denominated commodities.
The United States dollar slipped against rival currencies, dropping to a low of 92.23 at one point on Tuesday, which is its lowest level since January 2015. It last settled at 92.27, slumping 0.3 percent for the day.
Prices of oil are boosted when the United States currency weakens as dollar denominated commodities become cheaper for foreign investors holding other currencies.
On the New York Mercantile Exchange, crude oil for June delivery climbed 56 cents or 1.25 percent, to trade at $45.34 per barrel. In the previous session, crude prices sank $1.14 or 2.48 percent, after data indicated growing stockpiles in the United States.
According to a commodity analyst, supply levels at the main West Texas Intermediate delivery hub in Cushing, Oklahoma jumped by 871,000 barrels last week.
New York Mercantile Exchange crude prices have advanced nearly 50 percent since declining to 13 year lows at $26.05 in February, as a tumble in United States shale oil production lifted sentiment.
Still, analysts warned that the energy market conditions remained low because of an ongoing global glut supply.
In London, the ICE Futures Exchange Brent oil for July delivery soared 55 cents or 1.2 percent, to trade at $46.38 per barrel after dipping $1.54 on Monday as elevated production from the Organization of Petroleum Exporting Countries dampened sentiment.
A monthly survey of the Organization of Petroleum Exporting Countries members indicted that April output from the cartel increased 170,000 barrels per day month on month at 32.64 million barrels per day, as production surges led by Iran and Iraq more than offset a strike in Kuwait and other outages.
Futures of Brent crude prices have gained by roughly 45 percent since momentarily diminishing below $30 per barrel in February, despite the failure of talks in a Doha summit in April, aimed at accomplishing a production freeze among members and non-producers of the Organization of Petroleum Exporting Countries. OPEC will meet on June 2 in Vienna to discuss again the production freeze.
On the other hand, Brent’s discount to the West Texas Intermediate crude contract tacked on $1.04 per barrel, compared to an interval of $1.05 by close of trade on Monday.