Oil climbs on weaker dollar, outweighing OPEC+ supply worries

By Sonali Paul
MELBOURNE, April 6 (Reuters) - Oil prices rose early on
Tuesday as a drop in the U.S. dollar made crude a more
attractive buy, paring losses of more than 4% incurred overnight
on the prospect of producers returning more than 2 million
barrels per day of supply to the market by July.
Brent crude LCOc1 futures jumped 83 cents, or 1.3%, to
$62.98 a barrel at 0012 GMT, after falling 4.2% on Monday.
U.S. West Texas Intermediate (WTI) crude CLc1 futures rose
80 cents, or 1.4%, to $59.45 barrel, after sliding 4.6% on
Monday.
"The weaker U.S. dollar is a contributor, and increasing
(U.S.) growth confidence helps," said Michael McCarthy, chief
market strategist at CMC Markets and Stockbroking.
The dollar fell 0.4% against a basket of currencies =USD
on Monday and dipped a bit further on Tuesday. Oil prices
typically rise against a falling dollar, as a weaker greenback
makes dollar-priced oil cheaper for those holding other
currencies.
Adding to positive sentiment, England is set to ease
coronavirus pandemic restrictions on April 12, with the opening
of businesses including all shops, gyms, hair salons and outdoor
hospitality areas. That helped offset worries about the agreement last week by
the Organization of the Petroleum Exporting Countries (OPEC) and
allies, known as OPEC+, to bring back 350,000 barrels per day
(bpd) of supply in May, another 350,000 bpd in June and a
further 400,000 bpd or so in July. Saudi Arabia is also set to phase out its extra voluntary
cut of 1 million bpd over those three months. At the same time
OPEC member Iran, exempt from making voluntary cuts, is
boosting supply. OPEC/O
The push by OPEC+ to add supply came despite concerns about
a rise in COVID-19 cases.
"Rising virus cases in countries such as India and the
European Union are keeping traders cautious, with any renewed
restrictions likely to weigh on demand," ANZ Research said in a
note.