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Weak Dollar And Robust Refinery Activities In China Boost Oil Futures By 3 percent

Brent futures are up by 3 percent, settling at USD 75.67 a barrel (higher by USD 2.47, or 3.4 percent), on the back of the weak U.S. dollar and speedy recovery in Chinese refineries. On the other hand, U.S. West Texas Intermediate (WTI) crude settled at USD 70.62, higher by USD 2.35, or 3.4 percent.

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The U.S. gasoline crack spread was at its highest it has been since July last year. On the other hand, the futures for U.S. diesel climbed around 5 percent, the highest it's been since April-end.

In addition to the weakening dollar, another factor that drove up oil futures was China's robust refinery activities that hit new highs compared to last year. As oil demand is likely to rise in China, oil regained strength.

In Europe, the European Central Bank (ECB) increased interest rates once again to a 22-year high, hinting at a possible policy tightening, while they try to battle inflation. At the moment, the financial outlook and inflation are extremely hard to predict.

Additionally, oil prices were supported by the voluntary cut in crude output by the Organization of the Petroleum Exporting Countries (OPEC+) in May and again in July by Saudi Arabia to boost prices during a time when demand is strong.

Hence, a supply deficit of about 1.5 million barrels per day (bpd) is expected in June and over 2 million bpd in July.

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As per the Procurement Resource article, Brent crude and West Texas Intermediate futures rose by 3 and 3.4 percent, respectively. The two main factors that led to the climb in prices of crude oil were China restarting its refinery operations along with weak interest rates in the U.S. Another factor that is propelling oil prices is the tactic of tightening oil supply by the OPEC+ during a period when demand for the commodity is soaring.