Crude oil prices were up on Thursday with the decline in the value of the US dollar, which is causing a boost in oil demand from oil-importing countries.
However, prices are still under pressure due to rising US crude inventories and with a surge in novel coronavirus (COVID-19) cases, which topped 15 million worldwide.
International benchmark Brent crude was trading at $44.44 per barrel at 0641 GMT on Thursday for a 0.33% gain after closing Wednesday at $44.29 a barrel.
American benchmark West Texas Intermediate was at $42.05 a barrel at the same time for a 0.36% increase after ending the previous session at $41.90 per barrel.
The US dollar index, which measures the value of the American dollar against a basket of currencies including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, fell to $94.83 on Wednesday — its lowest level since March 9.
The decline in the value of the greenback is opportune for oil-importing countries in allowing more crude purchases at cheaper dollar prices, which in turn, is shoring up crude prices.
However, on the supply side, a surprise buildup in US crude oil inventories has renewed fears that the glut of supply on the global oil market will remain high for the remainder of 2020. It also signals that oil demand in the world’s largest oil-consuming country will stay low.
The Energy Information Administration (EIA) data showed on Wednesday that commercial crude oil inventories in the US rose by 4.9 million barrels, relative to the market expectation of a decline of 2.1 million barrels.
On the demand side, the forecast for global oil consumption is still weak due to high numbers of COVID-19 cases worldwide, which surpassed 15 million late Wednesday, according to the latest data from Johns Hopkins University.
The US continues to lead with the most cases at 3.97 million, followed by Brazil with more than 2.22 million cases, while India has the third highest with almost 1.24 million cases.
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