Oil prices rose on Tuesday buoyed by slightly positive market outlooks for the short term and stronger US economic data, despite thin trade ahead of the Christmas holiday.
Brent crude futures were up 33 cents, or 0.5 percent, to $72.96 a barrel and US West Texas Intermediate (WTI) crude futures rose 29 cents, or 0.4 percent to $69.53.
Solid economic prospects for the United States, the world’s largest oil consumer, provided support for prices.
New orders for key US-manufactured capital goods surged in November amid strong demand for machinery, while new home sales also rebounded.
These are signs that the US economy is on a solid footing towards the year-end.
There was ease from the US dollar which hovered around two-year highs on Monday morning. A stronger Dollar makes oil more expensive for holders of other currencies.
The Dollar index, which measures the US currency against six of its largest peers, resumed its upward trajectory.
It suffered its biggest one-day drop in nearly a month on Friday following a softer-than-expected reading on inflation that was still above the Federal Reserve’s 2 per cent target rate.
Last week, the US Central Bank projected a more measured pace of rate cuts than markets had anticipated, pushing the greenback higher.
On Friday, US data that showed cooling inflation helped alleviate concerns after the Federal Reserve interest rate cut last week.
Worries about China also remain as Asia’s top refiner Sinopec forecast that China’s oil consumption will peak in 2027, weighing on prices.
US President-elect Donald Trump on Friday urged the European Union to increase US oil and gas imports or face tariffs on the bloc’s exports.
He also threatened to reassert US control over the Panama Canal on Sunday, the route is very important for oil supply.
He accused Panama of charging excessive rates to use the Central American passage and this created a sharp rebuke from Panamanian President Jose Raul Mulino.
Market analysts note that a second Trump presidency, scheduled to start on January 20, will impact oil policies.