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Oil prices slightly strengthened on Monday as traders evaluated the impact of anticipated summer demand and geopolitical tensions against a stronger dollar. Brent crude futures rose by 15 cents, or 0.2%, reaching $85.39 a barrel by 0850 GMT, while US West Texas Intermediate crude futures were at $80.86 a barrel, up 13 cents, or 0.2%.
Both benchmarks experienced a 3% increase last week, marking their second consecutive weekly gains.
Tamas Varga of oil broker PVM attributed the price strength to the growing confidence that global oil inventories will decrease during the summer in the northern hemisphere due to seasonal demand for oil products.
Geopolitical risks in the Middle East and an increase in Ukrainian drone attacks on Russian refineries are also supporting oil prices, as reported by Reuters.
EU countries agreed on Monday to impose a new package of sanctions against Russia over its war in Ukraine, which includes a ban on reloading Russian liquefied natural gas (LNG) in the EU for further shipment to third countries.
However, the strengthening US dollar has reduced the attractiveness of dollar-denominated commodities for holders of other currencies.
IG analyst Tony Sycamore noted that the US dollar has shown a significant increase following better US PMI data on Friday night and political concerns ahead of the French election.
The dollar index, which measures performance against six major currencies, rose on Friday and slightly increased on Monday after data revealed that US business activity reached a 26-month high in June.
In Ecuador, state oil company Petroecuador declared force majeure on deliveries of Napo heavy crude for export after the shutdown of a key pipeline and oil wells due to heavy rain, according to sources on Friday.
In the United States, the number of operating oil rigs decreased by three to 485 last week, marking the lowest count since January 2022, as reported by Baker Hughes in a report on Friday.
