Oil prices up by 2% to 10-week high

Oil prices soared about 2 per cent to a 10-week high on Tuesday, boosted by a falling US dollar, hopes for higher demand in the developing world and supply cuts by the world’s biggest oil exporters.

Brent futures rose $1.51, or 1.9 per cent, to $79.20 a barrel by 1530 GMT. US West Texas Intermediate (WTI) crude rose $1.61, or 2.2 per cent, to $74.60.

Both benchmarks were on track for their highest closes since May 1, with Brent in technically overbought territory for the second time in three days.

The US dollar dropped to a two-month low against a basket of other currencies after US Federal Reserve officials signalled the central bank was near the end of its tightening cycle.

A weaker dollar makes crude cheaper for holders of other currencies.

“Oil has found a floor and the only thing ... that could break that is if US inflation is scorching hot and the Fed is forced to tighten this economy into a recession,” said OANDA analyst Edward Moya.

Markets were awaiting US inflation data on Wednesday for clues on the interest rate outlook. Higher rates can slow economic growth and reduce oil demand.