Investing.com - Crude oil prices opened slightly higher in Asia on Monday with the tailwind from a weaker dollar aiding sentiment.
US. West Texas Intermediate (WTI) crude futures for March delivery rose 0.44% to $66.42 a barrel.Meanwhile, April Brent crude futures, the benchmark for oil prices outside the US, edged up 0.03% to $70.17 a barrel. The US dollar index rose on 0.10% tyo 88.96, but has trended sharply lower over the past two weeks on comments from US policymakers nd concerns the US tax cuts will balloon the deficit.
Last week, oil prices ended Friday's session close to their strongest level since late 2014, amid ongoing optimism that OPEC-led output cuts would continue to drain the market of excess supplies.
Prices also drew support from a weakening US dollar, which on Friday hit new three-year lows against a basket of other leading currencies.
Oil prices typically strengthen when the US currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
Oil prices have risen almost 60% from around $43 a barrel in June, benefiting from production cut efforts led by the Organization of the Petroleum Exporting Countries and Russia. The producers agreed in December to extend current oil output cuts until the end of 2018.
The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.
Analysts and traders have recently warned that U.S. shale oil producers could ramp up production as they look to take advantage of higher prices, potentially derailing an OPEC-led effort to curb excess supply.
The number of oil drilling rigs climbed by 12 to 759 in the week to Jan. 19, General Electric (NYSE:NYSE:GE)'s Baker Hughes energy services firm said in its closely followed report on Friday. That marked the biggest weekly increase in the rig count since March.
Bullish bets by hedge funds and money managers on crude oil futures and options position in New York and London rose by 7,612 contracts to 549,602 in the week to Jan. 23, the CFTC said on Friday.
Domestic U.S. output has rebounded by 17% since the most recent low in mid-2016, and increasing drilling activity for new production means output is expected to grow further, as producers are attracted by climbing prices.
U.S. oil production rose to 9.87 million barrels per day last week, according to government data released during the week, the highest level since the early 1970s and close to the output of top producers Russia and Saudi Arabia.