Oil prices edge higher as weak dollar boosts demand

ISTANBUL

Oil prices edged up on Monday as investors sought to take advantage of last week's declines, while a weaker US dollar supported demand.

International benchmark Brent crude rose by 0.37%, trading at $66.58 per barrel at 10.32 a.m. local time (0732 GMT), up from $66.33 at the previous session's close.

Similarly, US benchmark West Texas Intermediate (WTI) increased by about 0.26%, reaching $64.71 per barrel, compared to $64.54 in the prior session.

Prices posted their sharpest weekly decline since March 2023 last week as geopolitical tensions in the Middle East eased. However, the US dollar's depreciation against other currencies is helping to support oil prices by boosting investor appetite.

The dollar index fell 0.3% to 97.2 on Monday, hovering near its lowest level in three years, weighed down by US President Donald Trump's continued criticism of the Federal Reserve.

The weak dollar is likely to increase demand by making oil more affordable for buyers using other currencies.

Meanwhile, reports that the OPEC+ group, made up of the Organization of the Petroleum Exporting Countries (OPEC) and allied non-OPEC producers, plans to raise output by 411,000 barrels per day in August is capping price gains.

The eight members of the group, including Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman, is expected to finalize production levels at its meeting on July 6.

The countries began phasing out voluntary production cuts in April, with similar increases in May, June and July. The planned hike in August would mark the fifth consecutive monthly increase.

On the demand side, concerns over China, the world's largest crude importer, continue to weigh on prices. China's manufacturing Purchasing Managers' Index (PMI) for June came in at 49.7, slightly above expectations but still indicating contraction.