Oil futures ended higher Tuesday, with Brent crude resuming a push to the upside as a bounce by the U.S. dollar appeared to lose steam.
West Texas Intermediate crude for February delivery CL.1, +1.72% CLG21, +1.72% rose 96 cents, or 1.8%, to finish at $53.21 a barrel on the New York Mercantile Exchange, its sixth straight positive session. March Brent crude BRN00, -0.07% BRNH21, -0.07%, the global benchmark, advanced 92 cents, or 1.7%, closing at $56.58 a barrel after losing ground the previous session. Both benchmarks saw their highest finish since Feb. 21.
Analysts said crude was taking a cue in part from equities, which were firmer after a modest Monday pullback.
“Crude prices are following the broader move into risky assets today,” said Edward Moya, senior market analyst at Oanda, in a note.
“It seems energy traders are just looking for a reason to buy as the macro outlook seems to be very positive once we get past these next few months. Earlier oil was boosted on a weaker dollar, but those declines have been kept in check,” he said.
The ICE U.S. Dollar Index DXY, -0.45%, which tracks the currency against a basket of six major rivals, fell 0.4% after bouncing late last week and Monday from a 2 1/2-year low. A weaker dollar is seen as a positive for commodities priced in the currency, making them cheaper to overseas buyers.
Analysts said crude remained underpinned by Saudi Arabia’s decision last week to cut its oil output by 1 million barrels a day in February and March, helping to blunt fears about the impact of a continued rise in COVID-19 cases and tougher lockdowns on demand.
Investors have also debated whether a sharp rise in crude prices since late last year could prompt a quick boost in output by U.S. shale producers. The Energy Information Administration’s short-term energy outlook for January, released on Tuesday, however, forecast U.S. output to fall to 11.1 million barrels a day this year, unchanged from its previous projection.
Production dropped to 11.3 million barrels a day in 2020 from a record 12.2 million barrels a day in 2019. The agency sees production rising to 11.5 million barrels a day in 2022. Production by the Organization of the Petroleum Exporting Countries, or OPEC, is expected to average 27.2 million barrels a day in 2021, up from an estimated 25.6 million barrels a day in 2020, the agency forecast.
February natural-gas futures NGG21, -0.33% rose 0.6 cent, or 0.2%, to end at $2.753 per million British thermal units.