WASHINGTON (dpa-AFX) - Oil prices shrugged off early weakness and surged higher on Tuesday after preliminary data showing a slowdown in U.S. manufacturing activity in the month of April raised hopes the Federal Reserve will start cutting interest rates soon.
The weak data and renewed hopes of an early rate cut weighed on U.S. dollar. The dollar index dropped to 105.61, losing nearly 0.5%.
West Texas Intermediate crude oil futures for June ended higher by $1.46 or 1.78% at $83.36 a barrel.
Brent crude futures settled at $88.42 a barrel, gaining $1.42 or about 1.63%.
The S&P Global US Composite PMI declined to 50.9 in April from 52.1 in the previous month, signaling only a slight expansion in the country's private sector, which was the softest since December, a preliminary estimate showed.
The S&P Global Flash US Manufacturing PMI fell to a four-month low of 49.9 in April 2024, from 52.0 in March. The reading was expected to come in at 52.0. The S&P Global US Services PMI dropped to a five-month low of 50.9 in April.
Traders now await weekly inventory data from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API report is due later today, while EIA will release its report Wednesday morning.
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