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Crude oil prices rose on Tuesday, riding on dollar's weakness and expectations of more economic stimulus in the U.S.
U.S. Treasury Secretary elect Janet Yellen's comments about the need for a larger stimulus took some shine off the dollar, and contributed to oil's uptick as additional economic relief from the government could well push up energy demand.
The dollar index, which eased to 90.40, was last seen hovering around 90.55, down nearly 0.25% from previous close.
Traders were also betting on hopes energy demand from China will pick up as recent data indicates recovery in the world's second largest economy is showing signs of gaining momentum.
West Texas Intermediate Crude oil futures for February ended up $0.62 or about 1.2% at $52.98 a barrel.
Brent crude futures were up $1.11 or about 2.03% at $55.86 a barrel a little while ago.
A report from the Energy Information Administration (IEA) forecasts world oil demand to recover by 5.5 million barrels per day to 96.6 million this year. That reflects a downward revision of 0.3 million barrels from last month's assessment.
Traders were also looking ahead to weekly inventory data. As Monday was a holiday for Martin Luther King Jr Day, the American Petroleum Institute (API) and the Energy Information Administration (EIA) will come out with their reports a day later, on Wednesday and Thursday, respectively.
Yellen called for additional stimulus to address the impact of the ongoing coronavirus pandemic, arguing the government needs to "act big."
Yellen acknowledged the mounting national debt facing the incoming administration but claimed the benefits of another relief package will far outweigh the costs.
"I think relief that we provide to those who are in the greatest need and to small businesses have the best chance of providing both relief to those who've been so badly affected by the pandemic and creating a great deal of spending per dollar spent," Yellen said during her Senate confirmation hearing. "They'll create jobs throughout the economy."
Yellen said targeting relief for those most in need during the pandemic could help the economy recover in the short term.
