International Brent crude futures were up 20 cents per barrel during Monday’s Asian session, following concerns that U.S. sanctions against Iran could impact crude supplies. As of 0620 GMT International Brent crude futures were trading at 457.01 per barrel while U.S. WTI futures were up to $54.02 per barrel, a 19 cent rise since its last close.
Investors cited the weakened dollar and implementation of OPEC’s production cuts as primary reasons why they believed that oil prices would move higher. Ongoing strife between the U.S. and Iran have also encouraged a positive outlook on oil prices. The dollar is down nearly 4 percent against its major trading partners since the start of 2017. Chinese refining is also set to be reduced this year by approximately 6 percent, effectively removing 900,000 barrels per day of capacity.
The Dollar Continues to Struggle
The dollar index was trading at 99.688 .DXY on Monday, down 0.2 percent. The greenback was trading at 112.36 yen on Monday, down 0.2 percent and heading back towards the November lows hit last week. The euro was steady on Monday morning at $1.0782.
According to statistics released by the Commodity Futures Trading Commission on Friday and related calculations by Reuters, speculators reduced their bullish dollar bets for the fourth consecutive week last week, with net long positions hitting their lowest numbers since October 2016.
The dollar’s outlook was further weakened by smaller-than-expected U.S. wage growth which spurred fears that the Federal Reserve would not raise interest rates in March as expected. Fed fund futures showed less than a 10 percent chance of a rate hike in March after Friday’s non-farm payroll data was released.