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Futures Movers: Oil edges higher as dollar feels renewed pressure, Libya force majeure

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Oil futures edged higher Tuesday, buoyed by a retreating U.S. dollar and a halt to crude exports from a Libyan port.

West Texas Intermediate crude for May delivery
CL.1,
+0.50%

CLK21,
+0.50%

rose 17 cents, or 0.3%, to $63.55 a barrel on the New York Mercantile Exchange. June WTI, the most actively traded contract, rose 25 cents, or 0.4%, to $63.68 a barrel. June Brent crude
BRN00,
+0.75%

BRNM21,
+0.75%
,
the global benchmark, was up 34 cents, or 0.5%, at $67.39 a barrel on ICE Futures Europe.

A weaker U.S. dollar “continues to offer support to the commodities complex, with the USD index trading down to its lowest levels since early March,” said Warren Patterson, head of commodities strategy at ING, in a note. “This has helped to push ICE Brent back above $67 a barrel despite concerns over oil demand in certain regions.”

The ICE U.S. Dollar Index
DXY,
+0.01%
,
a measure of the currency against a basket of six major rivals, was off slightly at 91.05 after trading as low as 90.86 and has fallen about 2.5% this month. A weaker dollar can be supportive for commodities priced in the currency, making them cheaper to users of other currencies.

The U.S. has averaged 67,175 new coronavirus cases a day in the past week, up 4% from the average two weeks ago. Meanwhile, the global case tally almost hit a record of more than 750,000 on Sunday and Monday, according to the Washington Post, as India and Brazil remained hot spots. 

On Monday, Libya’s National Oil Corporation declared force majeure on crude oil exports from the eastern port of Hariga, with a subsidiary, Agoco, forced to reduce its output due to lack of funding, Patterson noted.

The disruption could see the country’s output fall by 280,000 barrels a day, taking it below 1 million barrels a day for the first time since October, he said, after output staged a strong recovery late last year after the lifting of an oil blockade.

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