Oil prices rise amid weaker dollar

Oil prices edged higher on Wednesday on a weakening dollar and progress on the rollout of Covid-19 vaccines. However, gains were capped by a surprise increase in US crude inventories and tighter coronavirus lockdowns in Europe.

Brent crude futures rose $0.25, or 0.5%, to $51.01 a barrel by 1017 GMT. US West Texas Intermediate (WTI) crude futures were up $0.21, or 0.4%, at $47.83.

“A weak dollar is helping support the price, but the market is riding a wave of vaccine optimism. Yesterday (Tuesday), we had a strong rally due to the impending approval of a second Covid-19 vaccine,” said Harry Tchilinguirian, head of commodity research at BNP Paribas.
“The market is looking further ahead to the recovery instead of a near-term low oil demand.”

The dollar on Wednesday hit its lowest level against a basket of currencies since April 2018.
Meanwhile, Moderna Inc’s Covid-19 vaccine appeared set for regulatory approval this week after US Food and Drug Administration staff endorsed it as safe and effective.

The United States also expanded its rollout of the newly approved vaccine developed by Pfizer Inc and German partner BioNTech SE to hundreds of additional distribution centers on Tuesday.