Oil is showing a slight rise due to the weakening of the U.S. dollar

On Tuesday, the dollar weakened a bit and led to an increase in oil prices. Now there are worries on the market about a coming global recession. The growth of COVID-19 in China is also raising concerns. Both of these factors became the reason for the reduced demand from the world's largest importer of crude oil. All this influenced the mood of the market participants.

Wall Street Journal informed about a possibility of increasing oil production up to 500,000 barrels per day. OPEC+ is to meet on December 4, where a decision will be made. Following that message, oil prices fell nearly $5 a barrel on Monday.

Prices recovered quickly as well. Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman's statement brought it to this. He said that the kingdom continues to reduce production and does not participate in the discussions of other OPEC oil producers about a potential increase in oil production. The report was provided by the state news agency SPA. The data served as a refutation of the WSJ report.

According to CMC Markets analyst Tina Teng, the oil price recovery on Monday came on the back of a U.S. dollar pullback. It has been a major support for the recovery, because a weaker dollar makes oil cheaper for other currency holders.

Worries about oil demand are growing. The reasons are the U.S. Federal Reserve System's interest rate tightening and China's strict quarantine policy. Stephen Innes, managing partner at SPI Asset Management, believes that these reasons are stronger arguments than any positive factors, such as the European Union embargo on Russian oil.

Innes said that the possibility of a Russian retaliation is a critical risk to the price cap policy. In his opinion, in case of a response, the oil market will experience an additional bullish shock.