Oil extends gains despite dollar rally, trade war jitters

Oil prices extended their gains on Monday as investors shrugged off pressure from a stronger dollar and accelerating U.S. drilling activity, while the market digested the trade war risks and Washington’s threats to impose more tariffs.

Brent crude futures for April delivery rose 1.15%, or 84 cents, to $75.50 a barrel at 05:14 p.m. Makkah time. Nymex crude futures for March delivery also rose 1.20%, or 85 cents, to $71.85 a barrel.

This coincided with the rise in the dollar index – which measures its value against a basket of major currencies – by 0.25% to 108.31 points.

The robust performance came after oil posted a third straight weekly loss on Friday due to concerns about a global trade war following US President Donald Trump's policies.

Meanwhile, data from Baker Hughes showed on Friday that US oil drilling activity accelerated for the second week in a row, albeit at a slight pace.

Trump has threatened to impose 25% tariffs on steel and aluminum imports from all countries around the world, but the risk premium in commodity markets has risen and led to higher oil prices.