Oil prices rose around 1% on Tuesday, driven by the potential disruption in U.S. Gulf of Mexico oil production due to Tropical Storm Rafael and a weakening dollar amid the close U.S. presidential race. Brent crude futures increased by 45 cents, or 0.6%, settling at $75.53 a barrel, while WTI crude futures rose 52 cents, or 0.7%, to $71.99.
The weaker dollar, hitting a three-week low, also supported oil prices by making it cheaper for foreign buyers. As U.S. energy companies evacuated Gulf of Mexico platforms, analysts expect Rafael’s impact could reduce production by roughly 4 million barrels. Additionally, OPEC+ recently delayed a planned production increase to stabilize prices amid soft demand and growing non-OPEC supply, while top oil exporter Saudi Arabia lowered its flagship Arab light crude price for Asia in December. This week brings several influential events, including the U.S. Federal Reserve’s meeting and China’s National People’s Congress session, which traders hope will clarify fiscal stimulus measures for China’s oil demand outlook. Meanwhile, U.S. crude storage data is awaited, with analysts predicting a modest addition of 1.1 million barrels.