Oil prices was flat on Tuesday as stronger European economic data and optimism a deal will be struck between Greece and its creditors offset the impact of a supply glut and a stronger dollar. Prices recovered after falling earlier in the session, moving into positive territory as European shares climbed to a three-week high on expectations of a Greek deal, according to Reuters.
Brent crude was 2 cents lower at $63.32 a barrel at 8.04 a.m. EDT, after closing the previous session up 32 cents. U.S. crude for August delivery fell 35 cents to $60.03 a barrel. Strong European economic data supported prices despite a heavy global surplus of oil that has led to millions of barrels being afloat at sea as sellers struggle to find buyers for cargoes.
France’s manufacturing sector expanded in June for the first time since April 2014, while Germany’s private sector grew at a faster rate in June than in the previous month. “The data from France and Germany show there are flickers of life in the European economy, but strong supply is likely for some time to come, meaning subdued oil prices,” said Michael Hewson, chief market analyst at CMC Markets.
A stronger dollar pressured the oil price. The dollar index was up 0.9 percent, while the euro shed more than 1 percent against the greenback. Oil, denominated in the U.S. currency, becomes less affordable to holders of other currencies when the dollar strengthens.
