Oil up with demand boost from weak US dollar

By Zeynep Beyza Kilic

Oil prices increased on Tuesday, with trade boosted by a declining US dollar, while market players await the Federal Reserve's (Fed) future decisions on interest rates based on insights gained with the release of key macroeconomic data.

International benchmark Brent crude traded at $81.90 per barrel at 10.17 a.m. local time (0717 GMT) for a 0.28% rise from the closing price of $81.67 a barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $77.80 per barrel at the same time, for a 0.28% gain after the previous session closed at $77.58 per barrel.

The US dollar index, which measures the dollar's value against other currencies, fell 0.08% to 103.74.

The US dollar's decline supported trade by lowering oil prices for holders of other currencies, causing an increase in oil prices.

Analysts are awaiting the release of economic data in the US along with speeches from US Federal Reserve (Fed) officials this week for cues on the Fed's interest rate policy.

In March, the Fed is anticipated to maintain the current policy rate. Nonetheless, there is a 60% probability that the first interest rate cut will be made in June and a 16% chance that it will happen in May.

Data released on Monday revealed that new home sales in the country increased by 1.5% on a monthly basis to 661,000 in January, raising hopes of positive economic activity, although the numbers remained below market expectations.

Oil prices rallied amid concerns that the conflicts in the Red Sea would negatively affect global oil supply.

Iran-backed Houthis in Yemen announced over the weekend that US and British warplanes bombed the Shamir region of the city of Taiz in the southwest of the country.

A statement by the US Department of Defense revealed that the US and the UK, with the support of their allies, hit 18 Houthi targets in eight different places in Yemen.

The Houthis announced Monday that they targeted an American oil tanker in the Gulf of Aden and a number of American warships in the Red Sea.