Oil prices rebounded during Tuesday’s trading to tally a gain of more than 9% over the past three trading sessions. Analysts attributed the turnaround to a weaker U.S. dollar, violence in Ukraine and the Middle East and volatility tied to crude options expiration.
On the New York Mercantile Exchange, crude futures for delivery in March settled at $53.53 a barrel, up 75 cents, or 1.4%, from Friday’s settlement. U.S. markets were closed on Monday for Presidents Day and there was no settlement for Nymex WTI crude. Prices on Tuesday had fallen to lows under $51. The expiration of options on Nymex March crude futures contracts at Tuesday’s close fed volatility for the session. March crude futures contracts expire at the close on Friday.
As the Federal Open Market Committee pushes the agenda on a “fed funds hike, then U.S. Treasury prices go down and demand for the U.S. dollar goes down,” said Richard Hastings, macro strategist at Global Hunter Securities. “This weakens the U.S. dollar DXY, -0.38% and supports oil prices.”