US dollar, oil up in early Wednesday trade

Oil prices rose in early Wednesday trade. Brent crude rose by 0.43 per cent, or 0.34 cents, reaching $79.89 a barrel at 2:44 AM EST.

West Texas Intermediate (WTI) climbed by 0.44 per cent, or 0.33 cents, to trade at $74.70 a barrel.

The week ended January 19 saw a 6.67-million-barrel decline in U.S. crude stocks. However, gasoline stockpiles rose by 7.2 million barrels, raising worries about fuel demand in the largest oil-consuming nation in the world, as per a Reuters report on market sources citing American Petroleum Institute figures on Tuesday.

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA) data is expected to be released later today.

Oil prices were also affected by a stronger U.S. dollar since other currency buyers were forced to pay more for oil denominated in dollars, which decreased demand.

Notably, Wednesday saw the dollar index close to a six-week high compared to major peers as investors solidified their expectations that the Federal Reserve would take its time lowering interest rates given the strength of the American economy.

Supply-wise, on the other hand, following an early January halt due to protests, Libya’s 300,000 barrels per day (bpd) Sharara oilfield began operating again on January 21.

Meanwhile, North Dakota, the third-largest oil-producing state in the U.S., resumed some oil production following a disruption caused by weather, according to the state’s pipeline authority. However, there was still a 300,000 barrel per day (bpd) decline in output. Due to extreme cold, output had weakened by as much as 425,000 bpd by mid-January.