Crude oil futures rise for second day on weaker dollar, Libya

Forexpros – Crude oil futures rose for a second day on Tuesday, on the back of a broadly weaker dollar and amid expectations that it would take some time for Libya to resume oil production as fighting continued in the country’s capital.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at USD85.64 a barrel during European morning trade.

It earlier rose as much as 1.89% to trade at USD86.05 a barrel, the highest price since August 18.

The dollar remained lower against the euro despite a report showing that German economic sentiment fell sharply in August, as fears over the outlook for global growth weighed.

The euro strengthened against the dollar earlier after data showed that Germany’s manufacturing purchasing managers’ index remained unchanged at 52.0 in August, beating forecasts for a decline to 50.8.

The report came after a preliminary reading of the HSBC\'s China PMI inched up to 49.8 in August, from a final reading of 49.3 the previous month. The report bolstered risk appetite, following speculation that the reading could have been much weaker.

In Libya, fighting continued in capital Tripoli, seeing hopes for a quick end to the six-month-old battle for control of the oil-producing North African nation fade.

On Sunday, a spokesman for the rebel-controlled Arabian Gulf Oil Company said that the company could restart up to 180,000 barrels a day of production soon.

It could now take much longer for Libya\'s oil production to return to its previous levels, at which 1.3 million barrels a day were exported.

Brent oil for October settlement was at USD108.78 a barrel, up 0.45%, on the London-based ICE Futures Europe exchange.

The spread between the two contracts narrowed to USD23.14, down from Friday’s record high of USD26.42.

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