Oil also picked up the effects of increased expectations that the FED would end its interest rate hike, while the London stock market was impacted by the performance of healthcare and mining.
Oil prices declined on Monday on concerns that further interest rate hikes could dampen demand.
The dollar rose after U.S. employment data pointed to a tight labor market, raising expectations of another Federal Reserve (Fed) rate hike. Rises in the dollar make oil more expensive for holders of other currencies and may eventually affect demand.
Brent crude was down 0.2%, while U.S. West Texas Intermediate crude was down 0.1%.
The London Stock Exchange rose, but Cineworld reached an all-time low.
London’s FTSE 100 index closed Tuesday’s session higher as mining and oil stocks boosted trading, while Cineworld shares hit an all-time low.
Glencore Plc rose 3.3%, Devolver Digital Inc lost 10.9% and Cineworld Group fell 37.8% after the cinema chain operator filed a reorganization plan with the U.S. Bankruptcy Court.
The FTSE 100 closed up 0.6%, while the FTSE 250 added 0.9%.
Industrial miners rose 4.1% and the energy sector advanced 0.7%, supported by commodity prices.
Oil rallied 2% on the back of US inflation data
Oil prices rose 2% on Wednesday as US inflation data raised hopes that the Fed will end its interest rate hike cycle.
Brent crude rose 2.01%, while U.S. West Texas Intermediate closed up 2.1%. Prices were up about 2% on Tuesday.
The U.S. consumer price index (CPI) rose 0.1% last month, after advancing 0.4% in February, the Labor Department reported.
The dollar fell following the data release. If the dollar falls, this makes the dollar price of oil cheaper for buyers of other currencies.
A report from the American Petroleum Institute (API) showed that crude inventories rose by about 380,000 barrels last week.
London’s FTSE 100 gained on the back of a boost in healthcare and mining.
The FTSE 100 closed higher on Thursday, adding to its fifth straight day of gains, helped by healthcare and mining stocks as data showed the domestic economy stagnated in February.
Data from the National Bureau of Statistics showed the economy did not grow as expected in February, but January’s rebound was stronger than previously thought.
Earlier in the week, the International Monetary Fund said it now expects the UK economy to contract less than expected this year.
The commodity-heavy FTSE 100 finished up 0.2%, while the mid-cap FTSE 250 added 0.4%.
The healthcare sector was up 0.7%, while precious metals miners rose 2%, following strength in gold prices.
The food and beverage sector, which includes Imperial Brands shares, was down 0.5%.
Although concerns about a possible recession in the US have weighed on investor sentiment, defensive stocks such as pharmaceuticals, as well as those linked to commodities, have kept the FTSE 100 afloat recently.
Dollar rebounds after retail sales drop
The dollar posted its longest weekly losing streak in nearly three years on Friday on rising expectations that the Fed will end rate hikes after signs that inflation may be cooling.
U.S. wholesale prices, as measured by the producer price index (PPI), posted the biggest decline in nearly three years last month on Thursday, a day after the consumer price index (CPI) also softened, as expected.
The dollar index, which measures the performance of the U.S. currency against six other currencies, fell to its lowest level in nearly a year. It would be the fifth consecutive weekly decline.
Weekly data from the Commodity Futures Trading Commission shows that fund managers collectively hold a long position of $19.631 billion in the euro, while holding short positions against the yen, British pound, Canadian dollar, Australian dollar, New Zealand dollar and Swiss franc.
The pound was down 0.3% and against the euro was down 0.3%.
The New Zealand dollar declined 0.3% and the Japanese yen was flat.