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Oil Prices Rise on Weaker U.S. Dollar

Crude oil futures prices continued to advance on Thursday amid a deep fall of the U.S. dollar against major currencies and persistent optimism in the market.

The West Texas Intermediate (WTI) for August delivery grew 1.14 U.S. dollars, or 1.50 percent, to settle at 76.89 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for September delivery increased 1.25 U.S. dollars, or 1.56 percent, to settle at 81.36 U.S. dollars a barrel on the London ICE Futures Exchange.

The latest U.S. inflation data caused the U.S. dollar index drop to the lowest level since April 2022, which helped boost oil prices, according to John Kilduff, partner at Again Capital LLC.

The U.S. dollar index dropped around 0.75 percent on Thursday following a slump of nearly 1.2 percent on Wednesday.

The Organization of the Petroleum Exporting Countries (OPEC) on Thursday revised up its estimate on growth of global oil demand in 2023 by around 100,000 barrels per day, mainly due to higher demand from China in the second quarter.

Still, the International Energy Agency (IEA) on Thursday lowered its growth estimate of global oil demand for 2023 by 220,000 barrels per day based on persistent macroeconomic headwinds.

Oil prices rallied around 12 percent in two weeks, primarily on the back of the extension to the Saudi 1-million-barrel/day production cut to the end of August, alongside Russia’s 500,000-barrel/day export reduction, said Craig Erlam, senior market analyst at OANDA, a supplier of online multi-asset trading services.