Following the significant drop in the dollar on Thursday in the global market, Oil prices rose by 67 percent.
Recall that Prices of oil depreciated more than 1.5per cent in the previous session on worries about China’s embattled economy and potential for further increases in U.S. interest rates.
China’s central bank (CBN ) said it would keep liquidity reasonably ample and maintain “precise and forceful” policy to support economic recovery against headwinds.
“Oil traders like the fact that China isn’t going to tolerate weakness in economic activity,” said Naeem Aslam at Zaye Capital Markets.
The dollar index slipped off a two-month high the day after Federal Reserve meeting minutes left the door open for more rate hikes and data this week indicated a resilient U.S. economy.
Higher interest rates increase borrowing costs, which could slow economic growth and reduce oil demand.
On a bullish note, China made a rare draw on crude oil inventories in July, the first time in 33 months it has dipped into storage.
Data released on Wednesday showed that U.S. crude oil inventories fell by nearly 6 million barrels last week on strong exports and refining run rates.