Investing.com - Crude oil futures rallied on Tuesday, as a broadly weaker U.S. dollar boosted the appeal of dollar-denominated commodities.
On the New York Mercantile Exchange, crude oil for May delivery jumped 94 cents, or 1.81%, to trade at $52.85 a barrel during U.S. morning hours after hitting an intraday peak of $52.97.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.85% to trade at 98.89 early on Tuesday.
The dollar moved lower as the release of disappointing U.S. data sparked fresh concerns over the strength of the economy, fuelling uncertainty over the timing of a rate hike.
The U.S. Commerce Department said that retail sales rose 0.9% last month, disappointing expectations for a gain of 1.0%. Retail sales fell by 0.5% in February, whose figure was revised from a previously reported fall of 0.6%.
A separate report showed that producer prices rose by 0.2% last month, in line with forecasts, while the core producer price index eased up 0.2% last month, compared to forecasts for a gain of 0.1%.
Oil traders looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 3.8 million barrels in the week ended April 10.
Total U.S. crude oil inventories stood at 482.4 million barrels as of April 3, the most in at least 80 years.
On Monday, Nymex oil advanced 27 cents, or 0.52%, to close at $51.91, amid speculation an ongoing collapse in rigs drilling for oil in the U.S. will result in lower production.
The U.S. Energy Information Administration said that U.S. shale oil output was expected to record its first monthly decline in over four years next month. The EIA expects U.S. shale production to fall by 57,000 barrels per day in May from April.
U.S. oil futures have been well-supported in recent sessions amid mounting expectations that U.S. shale oil production has peaked and may start falling in the coming months.
According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. fell by 42 last week to 760, the lowest since December 2010. It was the 18th straight week of declines and the largest drop in a month.
Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for June delivery tacked on 69 cents, or 1.18%, to trade at $59.74 a barrel. On Monday, London-traded Brent prices rose 9 cents, or 0.15%, to settle at $59.04.
Investors continued to assess the impact of an Iranian nuclear deal on global supplies.
Market experts largely estimated that a ramp-up in Iranian crude exports could take several months after Western powers negotiated a tentative nuclear deal with Tehran earlier in the month.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $6.89 a barrel, compared to $7.13 by close of trade on Monday.