Oil prices extended gains on Wednesday, rising over 1 per cent, supported by a weaker dollar, but gains were capped by mounting fears of a US economic slowdown and the impact of tariffs on global economic growth, reports Reuters.
Brent futures rose 75 cents, or 1.08%, to $70.31 a barrel at 1300 GMT, while US West Texas Intermediate crude futures gained 82 cents, or 1.24%, to $67.07 a barrel.
Crude has been supported in recent days by a weaker US dollar and the Energy Information Administration (EIA) moving away from earlier calls of strongly oversupplied oil markets this year, UBS analyst Giovanni Staunovo.
The dollar struggled to lift off a five-month low against other major currencies on Wednesday, as traders digested tit-for-tat US-EU tariffs and a potential Russia-Ukraine ceasefire.
The dollar index which fell 0.5% to fresh 2025 lows on Tuesday, boosted oil prices by making crude less expensive for buyers holding other currencies.
"Easing dollar counters the bearish bias of global economic slowdown, although this seems short-lived," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
However, signs of cooling inflation offered investors some respite after US consumer prices increased less than expected in February.
But improvement is likely temporary against the backdrop of aggressive tariffs on imports that are expected to raise the costs of most goods in the months ahead.
US President Donald Trump's economic policies so far have centered on a blitz of tariff announcements. Some have taken effect and others have been delayed or are set to kick in later.
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