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New Delhi: Crude oil prices increased over 2% on Monday as a weak dollar and supply concerns offset the impact of ongoing fears of a global recession and rising covid cases in China.

At 12.50 pm, the September contract of Brent on the Intercontinental Exchange was at $103.59 a barrel, higher by 2.40% from its previous close. The August contract of West Texas Intermediate (WTI) on the NYMEX rose 2.20% to $99.74 per barrel.

“The dollar index slipped from 20-year highs which supported global commodities at lower levels. The U.S. economic data released on Friday was also better than expected and supported oil prices," Rahul Kalantri, vice president for commodities at Mehta Equities Ltd said. He added that the dollar is likely to remain volatile this week.

Kalantri also noted that crude oil prices jumped after media reports quoting an US official said that an immediate increase in Saudi Arabia’s oil output is not expected.

Ravindra Rao, head of commodity research at Kotak Securities said: “Crude oil may remain choppy amid position squaring near contract expiration however weakness may persist unless risk sentiment improves significantly."

The increase in prices comes after oil traded on an extremely volatile note last week. Rising covid cases in China, prospects of fresh lockdowns and anticipation of a global recession weighed on the prices last week. Analysts though say that the concerns still persist. China is one of the largest importers of oil and widespread Covid-related restrictions would severely impact oil demand from the country.

Despite the volatility in the global oil prices, the domestic retail prices of petrol and diesel have largely remained unchanged for nearly two months now. In the national capital, petrol is priced at 96.72 per litre, while diesel is sold for 89.62 a litre.

Prices in Mumbai were last revised on 15 July after the new state government announced a cut in value-added tax (VAT) on petrol by 5 a litre and by 3 a litre for diesel. Price of petrol in Mumbai is currently at 106.31 a litre, while that of diesel is 94.27 per litre.

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