Oil prices rose on Tuesday, rebounding from an early fall of more than $1 a barrel, on a lift from a weaker dollar and supply concerns highlighted by Saudi Arabia’s energy minister.
Benchmark Brent crude futures settled up 0.28% at $93.52 a barrel, while U.S. West Texas Intermediate crude futures rose 0.87% at $85.32.
The U.S. dollar index fell during afternoon trade, making dollar-denominated oil less expensive for other currency holders and helping to push prices higher.
Further support came from comments by Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, that energy stocks were being used as a mechanism to manipulate markets.
“It is my duty to make clear that losing emergency stocks may be painful in the months to come,” he told the Future Initiative Investment (FII) conference in Riyadh.
Meanwhile, tightening markets for liquefied natural gas (LNG) worldwide and supply cuts by major oil producers have put the world in the middle of “the first truly global energy crisis,” Fatih Birol, the head of the International Energy Agency (IEA), said on Tuesday.
The comments out of Riyadh and from the IEA are “a reminder that when it comes to the energy crisis, it’s far from over,” said Phil Flynn, an analyst at Price Futures Group. “There are still concerns the market is undersupplied.”
Oil fell by more than $1 a barrel earlier on Tuesday on signs of uncertain economic activity in the United States and China, the world’s two biggest oil consumers.
On Monday, government data showed China’s crude oil imports in September were 2% lower than a year earlier, while business activity contracted in the euro zone, the United Kingdom and the United States in October.
Goldman Sachs CEO David Solomon said on Tuesday that he believes a U.S. recession is “most likely,” while a recession could be occurring in Europe.
The Federal Reserve could raise its benchmark overnight interest rate beyond the 4.50%-4.75% range if it does not see real changes in behavior, he said at the FII conference.
U.S. crude oil inventories are expected to rise this week, which could limit price gains. Analysts polled by Reuters estimated on average that crude inventories rose by 200,000 barrels in the week to Oct. 21.
