SINGAPORE: Oil prices rose in Asia on Tuesday as dealers made the most of a weakening dollar while keeping an eye on continuing fighting in Iraq, analysts said.
US benchmark West Texas Intermediate for August delivery rose 35 cents to $105.72 while Brent crude gained 24 cents to $112.60 in afternoon trade.
“We are seeing oil prices gain a bit following the weakening of the US dollar from last week,” Ric Spooner, chief market analyst at CMC Markets in Sydney, told Agence France-Presse.
The dollar advanced against the yen and euro in Asian trade Tuesday, but was still lower than levels seen last week before the release of weak US economic data.
US consumer spending rose only marginally, while jobless claims, another barometer for the world’s biggest economy, decreased less than expected.
As oil is traded in the US currency, a weaker dollar makes the commodity cheaper for global buyers, spurring demand and boosting prices.
Spooner said investors were continuing to keep a close watch on the security situation in major crude producer Iraq.
Islamist militants who have overrun swathes of territory in Iraq’s north on Sunday declared a caliphate in the regions they control, as fighting with government forces continued unabated.
The militants, who began a lightning offensive on June 9, have yet to directly threaten the key oil-producing region in the country’s south.
The violence in Iraq has a direct bearing on global crude prices because the country is the second-biggest oil exporter in the 12-nation Organization of the Petroleum Exporting Countries after Saudi Arabia.