Investing.com - Crude oil futures were modestly higher on Tuesday, as prices continued to draw support from hopes of a third round of monetary easing in the U.S. as well as fears over a disruption to Iranian oil exports, but gains were capped amid worries over the outlook for the global economy.
On the New York Mercantile Exchange, light sweet crude futures for delivery in May traded at USD107.22 a barrel during European morning trade, edging up 0.17%.
The May contract traded between a range of USD106.67, the daily low and a session high of USD107.23 a barrel.
Appetite for riskier assets was boosted after Fed Chair Bernanke said Monday that “continued accommodative policies” are needed to bring about big gains in the U.S. jobs market, which he described as “far from normal,” despite a recent improvement.
Markets interpreted the comments as an indication the central bank will maintain its ultra-loose monetary policy and reinforced the view that further easing from the central bank may be possible.
The possibility of further easing weighed heavily on the U.S. dollar, which traded at a four-week low against the euro and the Swiss franc and a five-month low against the pound.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.2% to trade at 78.95, the lowest since March 2.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
Prices drew additional support from ongoing concerns over escalating tensions between Iran and Western powers after U.S. President Barack Obama said Monday that “time is short” to solve the showdown with Iran diplomatically.
A potential loss of Iranian barrels has helped underpin strong gains in oil prices this year and prices could go higher when a European Union embargo on Iranian oil imports go into effect on July 1.
Oil prices spiked higher on Friday, jumping almost USD3 per barrel in a matter of minutes after a report from Petrologistics, a Geneva-based industry group, indicated that Western-led sanctions are starting to take their toll on Iran's oil industry.
According to the group, Iran's oil exports in March fell by 300,000 barrels a day, or 14% from a month earlier as tighter Western sanctions have prompted top Iranian crude buyers, including China and India, to seek supplies from other countries.
But gains were limited amid growing concerns over global economic growth prospects, which in turn have triggered worries over global oil demand.
Concerns over a possible slowdown in China resurfaced last week, after data showing that manufacturing activity contracted in March, while renewed concerns of further debt contagion in the euro zone also weighed.
China was the world’s second-biggest oil user in 2010, accounting for 11% of consumption while European Union nations accounted for 16% of global demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery eased up 0.1% to trade at 125.75 a barrel, with the spread between the Brent and crude contracts standing at USD18.53.
Hopes for a quick resumption in South Sudan crude output were dashed after Sudan's President Omar Hassan al-Bashir suspended a planned meeting in South Sudan's capital Juba following clashes between armed forces from both sides on Monday, state media reported.
A restart at South Sudan's oil fields would have brought output from the two countries back to about 350,000 barrels per day, up from about 50,000 barrels currently.
South Sudan seceded from Sudan in July under a 2005 peace deal that ended decades of civil war, but the two countries have remained at loggerheads over issues including oil, debt and fighting along the poorly drawn border.
On the New York Mercantile Exchange, light sweet crude futures for delivery in May traded at USD107.22 a barrel during European morning trade, edging up 0.17%.
The May contract traded between a range of USD106.67, the daily low and a session high of USD107.23 a barrel.
Appetite for riskier assets was boosted after Fed Chair Bernanke said Monday that “continued accommodative policies” are needed to bring about big gains in the U.S. jobs market, which he described as “far from normal,” despite a recent improvement.
Markets interpreted the comments as an indication the central bank will maintain its ultra-loose monetary policy and reinforced the view that further easing from the central bank may be possible.
The possibility of further easing weighed heavily on the U.S. dollar, which traded at a four-week low against the euro and the Swiss franc and a five-month low against the pound.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.2% to trade at 78.95, the lowest since March 2.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
Prices drew additional support from ongoing concerns over escalating tensions between Iran and Western powers after U.S. President Barack Obama said Monday that “time is short” to solve the showdown with Iran diplomatically.
A potential loss of Iranian barrels has helped underpin strong gains in oil prices this year and prices could go higher when a European Union embargo on Iranian oil imports go into effect on July 1.
Oil prices spiked higher on Friday, jumping almost USD3 per barrel in a matter of minutes after a report from Petrologistics, a Geneva-based industry group, indicated that Western-led sanctions are starting to take their toll on Iran's oil industry.
According to the group, Iran's oil exports in March fell by 300,000 barrels a day, or 14% from a month earlier as tighter Western sanctions have prompted top Iranian crude buyers, including China and India, to seek supplies from other countries.
But gains were limited amid growing concerns over global economic growth prospects, which in turn have triggered worries over global oil demand.
Concerns over a possible slowdown in China resurfaced last week, after data showing that manufacturing activity contracted in March, while renewed concerns of further debt contagion in the euro zone also weighed.
China was the world’s second-biggest oil user in 2010, accounting for 11% of consumption while European Union nations accounted for 16% of global demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery eased up 0.1% to trade at 125.75 a barrel, with the spread between the Brent and crude contracts standing at USD18.53.
Hopes for a quick resumption in South Sudan crude output were dashed after Sudan's President Omar Hassan al-Bashir suspended a planned meeting in South Sudan's capital Juba following clashes between armed forces from both sides on Monday, state media reported.
A restart at South Sudan's oil fields would have brought output from the two countries back to about 350,000 barrels per day, up from about 50,000 barrels currently.
South Sudan seceded from Sudan in July under a 2005 peace deal that ended decades of civil war, but the two countries have remained at loggerheads over issues including oil, debt and fighting along the poorly drawn border.