Oil prices edged higher on a weaker dollar and diplomatic tensions in the Gulf yesterday. Benchmark Brent crude futures were up 24 cents at 49.54 dollars a barrel, while U.S. West Texas Intermediate (WTI) crude futures traded at 47.09 dollars a barrel, up 17 cents.
Investors were also taking positions ahead of a meeting between OPEC and non-OPEC members in Russia on Monday at which they will discuss compliance with agreed production cuts .
They will examine progress towards rebalancing an oversupplied market.
“The weak dollar, the rising tension between Kuwait and Iran and the upcoming meeting in St. Petersburg should all contribute to some kind of short-covering today,” Tamas Varga, senior analyst at London brokerage PVM Oil Associates, said.
The dollar index fell to the lowest in more than a year on Friday, incentivising the purchase of dollar-denominated commodities such as crude oil.
OPEC members Iran and Kuwait are embroiled in a diplomatic spat that saw Kuwait ordering the expulsion of the Iranian ambassador and other diplomats for alleged links to a “spy and terror” cell.