Oil prices jump 3 percent on weak dollar

27/04/2016 05:00 AST

Oil markets rose about 3 percent on Tuesday as a tumbling dollar boosted commodities denominated in the greenback after bets the Federal Reserve will hold US interest rates where they are.

Crude oil futures also rose on the back of a 3-percent hike in US gasoline and ultra-low sulfur diesel, or heating oil, prices. US gasoline margins climbed as high as 4 percent in early trading in part on a series of refinery unit outages in the US Gulf Coast market, traders said.

"I think the market has become more optimistic on oil products," said Scott Shelton, broker and commodities specialist with ICAP in Durham, North California. "If refining margins stay strong, crude runs will be quite high and that will make the odds of a crude stock draws increase significantly."

Analysts polled by Reuters expect the US government to announce on Wednesday that crude stocks fell by 2.3 million barrels last week while distillate and gasoline stockpiles fell. Industry group American Petroleum Institute will issue preliminary inventory later on Tuesday. Crude futures rose from early in the session as the dollar fell about half a percent ahead of Wednesday's Fed policy statement. The dollar rallied earlier this year, weighing on oil, as investors braced for possible interest rate hikes from the Fed's Federal Open Market Committee (FOMC).

Brent crude futures were up $1.30, or nearly 3 percent, at $45.78 a barrel by 12:37 p.m. EDT (1637 GMT). US crude futures rose $1.40, or 3.3 percent, to $44.04.

Arab News