Oil prices extended their rally on Tuesday after a day of big gains on Monday as traders remained optimistic that OPEC will announce fresh production cuts after its meeting in Vienna later this week. On Monday both U.S WTI future and crude oil futures gained around 4 percent, with the rally prompted largely by the trade war ceasefire between the United States and China over the weekend, as well as expectations of a production cut. Prices for both benchmarks were both over 1 percent higher in the late afternoon in Hong Kong, with U.S. WTI futures up 1.02 percent as of 3:01 HK/SIN to trade at $52.46 per barrel. Brent was up 1.01 percent to trade at $62.31 per barrel.
In an effort to help OPEC keep prices from falling further the Canadian province of Alberta called for producers to cut output by 325,000 barrels per day until crude stockpiles are reduced. OPEC and Russia, its oil-producing ally, will need to further reduce production by 1.3 million barrels per day in order to balance out the current high inventories.
Dollar in Trouble
The dollar was lower on Tuesday after U.S. Treasury yields fell to three-month lows, a sign that the Federal Reserve might not raise interest rates as quickly as expected. The dollar index dropped 0.37 percent to 96.86 .DXY. Following the trade truce investors regained their interest in riskier currencies, a sentiment that did little to help the greenback. The dollar fell 0.52 percent against the yen to 113.06 and 0.14 percent against the Canadian dollar to $1.3176. It was also lower against the British pound and the euro.