Oil rises on weaker dollar, offsets OPEC+ supply fears

Oil prices climbed on Tuesday as the dollar’s decline made crude more attractive to traders. Prices recovered from a 4% drop overnight due to the prospect of producers returning over 2 million bpd of supply to the market by July.

Brent crude futures rose 1.3%, or 83 cents, at $62.98 per barrel following a 4.2% decline on Monday. U.S. West Texas Intermediate crude futures gained 1.4%, or 80 cents, at $59.45 per barrel after falling 4.6% on Monday.

The dollar’s decline and Great Britain’s plan to ease COVID-19 lockdowns on April 12 offset fears about OPEC and its allies’ agreement to return 350,000 bpd of supply to the market in May. The organization also plans to return 350,000 bpd in June and 400,000 bpd in July.

Saudi Arabia is set to cease its voluntary output cut of 1 million bpd over the next three months. On the other hand, OPEC member Iran is exempted from making voluntary cuts. 

OPEC’s decision to put additional supply back to the market came despite worries about a surge in coronavirus infections.