After dropping in Monday’s trading, oil futures were up in Tuesday’s trading with analysts suggesting prices got a boost from some weakness in the U.S. dollar. Traders also weighed uncertainty over OPEC’s next move about production levels.
West Texas Intermediate crude for August deliver rose 19 cents or 0.5% on the New York Mercantile Exchange to settle at $40.29 a barrel. Earlier in the day, prices had dropped to $39.07.
September Brent crude, considered the global benchmark was up 18 cents or 0.4% at $42.90 on ICE Futures Europe. Prices are considered to be vulnerable to losses because of the growing tensions between the U.S. and China, not to mention the growing COVID-19 cases in the country and the rest of the world.
“Crude prices reversed earlier losses as a weaker U.S. dollar persisted and gave most commodities a boost,” Edward Moya, senior market analyst at Oanda, told MarketWatch. U.S. benchmark crude futures are back above the $40 level, but still below the last week’s key high of $41.08, he added.
In a note, Moya attributed earlier price declines to “concerns OPEC+ could trigger a taper tantrum,” reducing the size of the current cuts of 9.7 million barrels per day to 7.7 million barrels per day, even as coronavirus restrictions are no longer steadily easing.
But Moya also had a warning about the ability of crude prices to remain where they are.
“WTI crude will not be able to stay near the $40 level if coronavirus spread continues to damage reopening efforts that will be accompanied with much softer demand for crude,” he said.
As oil prices rose, so did some local stocks such as Devon Energy where prices were up 4.72% or 47 cents a share, ending the day at $10.43.
SandRidge Energy, the company that sold its headquarters building last month to the state of Oklahoma saw shares go up 4.03% or 5 cents, settling at $1.29.
Others saw big jumps such as ConocoPhillips where prices per share rose 4.16% or $1.65, ending the day at $41.31. EOG Resources jumped 5.18% or $2.33 more a share and finished the day at $47.28.
Maraton Oil went up 4.67% or 24 cents settling at $5.37 while ONEOK saw an increase of 63 cents per share for a 2.36% gain before finishing the day at $27.22. Phillips 66 went up $1.69 or 2.80% to end the day at $61.96 a share.
On the Utilities sector, American Electric Power rose 59 cents or 0.69% to finish Tuesday’s trading at $85.35.