Oil prices up with China's policy rate cut, weak dollar

By Zeynep Beyza Kilic

Oil prices rose on Tuesday, supported by bullish economic data from China, the world's largest oil importer and the depreciation of the US dollar.

International benchmark Brent crude traded at $86.47 per barrel at 10 a.m. local time (0700 GMT), a 0.30% rise from the latest closing price of $86.21 per barrel on Monday.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $82.66 per barrel, up 0.18% from Monday’s session close of $82.51 per barrel.

China's unexpected interest rate decrease raised hopes that the country would resume its economic recovery in the post-Covid period. China reduced lending to some financial organizations by 15 basis points.

High oil consumption in the summer provided evidence of some economic recovery, as did a 17.4% increase in refinery output in July compared to the same month last year.

Since the US dollar lost 0.13% of its value against other currencies, dollar-denominated oil became less expensive for buyers using other currencies, resulting in more purchases and higher prices.

Furthermore, data showing faster than expected economic growth in the April-June period in Japan, the second-largest economy in the region, also supported upward price movements.