Oil extends rebound amid renewed OPEC cut hopes

Oil prices on both sides of the Atlantic extend previous rebound in Europe, as the sentiment remains underpinned on renewed expectations of an OPEC output cut action, while a broadly lower US dollar also supports.

Oil awaits API inventory report

Currently, both crude benchmarks rally almost 2%, with Brent extending above $ 45 while WTI nears 44.50 levels. Oil prices extend its recovery mode into a second straight session this Tuesday, largely on the back of reports that the OPEC producers are reconsidering oil output cut proposals, refueling hopes of a deal in the OPEC's upcoming meeting later this month.

Additionally, expectations of a major fall in the US shale oil production coupled in the upcoming months combined with the lowest level of Chinese oil output in seven years, boosts the ongoing recovery in the black gold.

While a sharp correction seen in the US dollar against its major peers after the recent upsurge, also benefits the USD-sensitive oil. A weaker US dollar makes the USD denominated commodity cheaper for holders in foreign currencies and vice-versa.

Attention now turns towards the weekly stockpiles reports from the US due today and tomorrow for fresh incentives on oil prices.

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