Oil rises on weak dollar; investors weigh surge in supplies, demand outlook

Oil prices rose in early Asian trade on Friday, boosted by a weaker dollar as traders weighed a surge in supplies and the pandemic’s impact on fuel demand.

Brent crude futures for June gained 0.1%, or 7 cents, at $63.27 per barrel, while U.S. West Texas Intermediate crude for May delivery climbed 0.3%, or 17 cents, at $59.77 per barrel.

A weaker dollar makes oil cheaper for buyers using other currencies, which commonly helps boost prices.

Both contracts are on course for a 2%-3% decline this week after OPEC and its allies decided to slowly increase supplies by 2 million bpd between May and July. 

Still, analysts expect global oil stocks to continue to decline as fuel demand rises in the second half of this year, when global economic recovery is expected to strengthen.

However, worries that fresh lockdowns to curb a surge in COVID-19 infections and vaccination problems could alter outlook for oil demand.