Oil prices initially ascended on a weaker dollar on Monday. Brent crude futures climbed by 24 cents or 0.53$ at $45.78 per barrel, as well as the United States West Texas Intermediate crude futures which rose by 21 cents or 0.49%, trading at $43.22 per barrel. However, increased U.S. drilling activity strengthened the worries that a global output oversupply would still persist.
Even though oil prices have recovered from 10-month low, the market is still low by about 13% since late May, when OPEC and some manufacturers agreed to extend the deal to cut production in the first quarter of 2018.
The U.S. dollar remained low against a basket of rival currencies with failing expectations for the Fed to raise interest rates once more later this year.
On Monday the greenback lost strength vs. its major currency rivals as the United States Treasury yields stayed low with falling expectations that the Fed would go for a rate hike one more time this year. Against its six major currency rivals, the U.S. dollar index went a little lower closing at 97.239.DXY, which adds to Friday’s losses when the dollar fell by 0.4%.Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo, said that the main reason behind the dollar’s weakness were the United States yields which were stuck at low level.