Investing.com - Crude oil futures reversed higher on Monday, as traders continued to monitor the direction of the dollar to gauge the appeal of dollar-denominated commodities.
On the New York Mercantile Exchange, crude oil for delivery in May rallied 54 cents, or 1.16%, to trade at $47.11 a barrel during U.S. morning hours. Prices were down more than 2% earlier at session lows of $45.34.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for May delivery climbed 78 cents, or 1.4%, to trade at $56.11 a barrel, rebounding from an intraday low of $54.13.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $9.00 a barrel, compared to $8.75 by close of trade on Friday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.7% to 97.36 on Monday. The index ended last week down 2.53%, the biggest weekly loss since October 2011.
The dollar's losses came after the Federal Reserve downgraded its forecasts for growth and inflation and lowered its interest rate projections, prompting investors to push back expectations on the timing and pace of future rate increases.
Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.
Oil prices were down sharply earlier after bearish comments by Saudi Arabia’ oil minister prompted market players to refocus their attention on ample global supplies.
Saudi Arabian Oil Minister Ali al-Naimi said on Sunday that the kingdom will continue to pursue the strategy of defending its own market share against non-OPEC producers rather than help support oil prices.
"We tried, we held meetings and we did not succeed because countries outside OPEC were insisting that OPEC carry the burden and we refuse that OPEC bears the responsibility," Naimi said.
The comments underlined the view that Saudi Arabia will not change its stance on oil production.
Oil prices have fallen sharply in recent months as OPEC resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.