Investing.com - Oil prices shook off earlier weakness in North American trade on Monday, bouncing off a four-week low as the dollar turned lower against the other major currencies.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.1% to 94.48, after hitting highs of 94.83 earlier in the session and re-approaching last week’s five-and-a-half month low of 94.30.
Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.
On the ICE Futures Exchange in London, Brent oil for June delivery fell by almost 1.5% to an intraday low of $38.12 a barrel, a level not seen since March 4, before recovering to $38.69 by 12:41GMT, or 8:41AM ET, up 2 cents, or 0.05%.
Russia’s Energy Minister Alexander Novak said earlier that Iran has agreed to join an oil output freeze deal once it production reaches 4 million barrels per day. Iran's daily output is currently 3.3 million barrels per day.
On Friday, London-traded Brent futures slumped $1.66, or 4.12%, after Saudi Deputy Crown Prince Mohammed bin Salman said the kingdom will not cap output unless Iran and other major producers do so, casting doubts over whether a highly awaited production freeze will happen.
Iran has maintained that it will not contribute to any output freeze until its crude exports return to pre-sanction levels.
London-traded Brent futures declined $2.60, or 4.45%, last week, the second straight weekly loss, amid uncertainty over a deal between major producers to cap output.
Producers from the Organization of the Petroleum Exporting Countries and non-members are due to meet in Doha, Qatar on April 17 to discuss an output freeze. But it isn’t clear exactly which, or how many, OPEC and non-OPEC members will attend the meeting.
Despite recent losses, Brent futures are up by roughly 40%, since briefly dropping below $30 a barrel on February 11. Short-covering began in mid-February after Saudi Arabia and fellow OPEC members Qatar and Venezuela agreed with non-OPEC member Russia to freeze output at January levels, provided other oil exporters joined in.
Elsewhere, crude oil for May delivery on the New York Mercantile Exchange tacked on 15 cents, or 0.41%, to trade at $36.94 a barrel after slumping to a daily low of $36.18, the weakest level since March 8.
Nymex oil plunged $1.55, or 4.04%, on Friday, taking its losses for the week to $2.91, or 7.05%, as data showing that U.S. oil supplies rose to yet another all-time high last week underlined concerns over a domestic supply glut.
Since falling to 13-year lows at $26.05 on February 11, U.S. crude futures have rebounded by approximately 40% as a decline in U.S. shale production boosted sentiment. However, analysts warned that market conditions remained weak due to an ongoing glut.
Meanwhile, Brent's premium to the WTI crude contract stood at $1.75 a barrel, compared to a gap of $1.88 by close of trade on Friday.