You are here: Home » Reuters » News
Business Standard

Oil extends gains as dollar and U.S. inventories fall

Reuters  |  LONDON 

By Edmund Blair

(Reuters) - prices rose for a second day on Thursday, supported by U.S. data showing crude inventories had dipped after rising for nine weeks and a weaker dollar after the U.S. Federal Reserve signalled it would not hike rates faster than expected.

Brent crude was up 38 cents at $52.19 a barrel by 1050 GMT, recovering from Tuesday's slide to $50.25, its lowest level since Nov. 30 when the Organization of the Petroleum Exporting Countries announced plans to cut supplies.

U.S. light crude was up 37 cents at $49.23 a barrel, also climbing from a three-month low.

The rebound has been cautious, with investors looking for evidence that OPEC-led supply cuts will bring a sustained drawdown in stockpiles since OPEC and non-OPEC producers began cutting back output on Jan. 1.

"The dollar is weaker due to the U.S. Fed. I don't think it is going to be enough to bring some follow-through buying to crude We need something more substantial," said Olivier Jakob of Swiss consultancy Petromatrix.

The U.S. Energy Information Administration said on Wednesday that crude stocks fell 237,000 barrels in the week to March 10, defying forecasts of a 10th weekly rise. [EIA/S]

Further support came on Wednesday from the International Energy Agency (IEA). Although inventories rose in January, the agency said the market could be in deficit by 500,000 barrels per day (bpd) in the first half of 2017.

OPEC has broadly complied with its commitment to cut 1.2 million bpd in the first half of the year, but investors have been unnerved as stocks have kept climbing. The IEA called for patience, saying cuts would take time to feed through. [IEA/M]

Thursday's price rise seemed largely powered by a dip in the dollar, helping commodities across the board. A decline in the U.S. currency makes dollar-denominated commodities less expensive for holders of other currencies.

OPEC has said it wants to see inventories fall below the five-year average for industrialised nations. Stephen Brennock of PVM brokerage said this would be achieved only if OPEC kept supply reductions beyond the first half of 2017.

"Unless OPEC agrees to extend its self-imposed production restraint beyond the June deadline, any claims of victory in the battle against the glut will be premature," Brennock said.

OPEC member Kuwait said this week that it was ready to prolong the deal to reduce supply. But OPEC heavyweight Saudi Arabia, the world's biggest exporter, has said it is too early to consider an extension.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Christopher Johnson and Dale Hudson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

RECOMMENDED FOR YOU

Oil extends gains as dollar and U.S. inventories fall

LONDON (Reuters) - Oil prices rose for a second day on Thursday, supported by U.S. data showing crude inventories had dipped after rising for nine weeks and a weaker dollar after the U.S. Federal Reserve signalled it would not hike rates faster than expected.

By Edmund Blair

(Reuters) - prices rose for a second day on Thursday, supported by U.S. data showing crude inventories had dipped after rising for nine weeks and a weaker dollar after the U.S. Federal Reserve signalled it would not hike rates faster than expected.

Brent crude was up 38 cents at $52.19 a barrel by 1050 GMT, recovering from Tuesday's slide to $50.25, its lowest level since Nov. 30 when the Organization of the Petroleum Exporting Countries announced plans to cut supplies.

U.S. light crude was up 37 cents at $49.23 a barrel, also climbing from a three-month low.

The rebound has been cautious, with investors looking for evidence that OPEC-led supply cuts will bring a sustained drawdown in stockpiles since OPEC and non-OPEC producers began cutting back output on Jan. 1.

"The dollar is weaker due to the U.S. Fed. I don't think it is going to be enough to bring some follow-through buying to crude We need something more substantial," said Olivier Jakob of Swiss consultancy Petromatrix.

The U.S. Energy Information Administration said on Wednesday that crude stocks fell 237,000 barrels in the week to March 10, defying forecasts of a 10th weekly rise. [EIA/S]

Further support came on Wednesday from the International Energy Agency (IEA). Although inventories rose in January, the agency said the market could be in deficit by 500,000 barrels per day (bpd) in the first half of 2017.

OPEC has broadly complied with its commitment to cut 1.2 million bpd in the first half of the year, but investors have been unnerved as stocks have kept climbing. The IEA called for patience, saying cuts would take time to feed through. [IEA/M]

Thursday's price rise seemed largely powered by a dip in the dollar, helping commodities across the board. A decline in the U.S. currency makes dollar-denominated commodities less expensive for holders of other currencies.

OPEC has said it wants to see inventories fall below the five-year average for industrialised nations. Stephen Brennock of PVM brokerage said this would be achieved only if OPEC kept supply reductions beyond the first half of 2017.

"Unless OPEC agrees to extend its self-imposed production restraint beyond the June deadline, any claims of victory in the battle against the glut will be premature," Brennock said.

OPEC member Kuwait said this week that it was ready to prolong the deal to reduce supply. But OPEC heavyweight Saudi Arabia, the world's biggest exporter, has said it is too early to consider an extension.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Christopher Johnson and Dale Hudson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

Oil extends gains as dollar and U.S. inventories fall

By Edmund Blair

(Reuters) - prices rose for a second day on Thursday, supported by U.S. data showing crude inventories had dipped after rising for nine weeks and a weaker dollar after the U.S. Federal Reserve signalled it would not hike rates faster than expected.

Brent crude was up 38 cents at $52.19 a barrel by 1050 GMT, recovering from Tuesday's slide to $50.25, its lowest level since Nov. 30 when the Organization of the Petroleum Exporting Countries announced plans to cut supplies.

U.S. light crude was up 37 cents at $49.23 a barrel, also climbing from a three-month low.

The rebound has been cautious, with investors looking for evidence that OPEC-led supply cuts will bring a sustained drawdown in stockpiles since OPEC and non-OPEC producers began cutting back output on Jan. 1.

"The dollar is weaker due to the U.S. Fed. I don't think it is going to be enough to bring some follow-through buying to crude We need something more substantial," said Olivier Jakob of Swiss consultancy Petromatrix.

The U.S. Energy Information Administration said on Wednesday that crude stocks fell 237,000 barrels in the week to March 10, defying forecasts of a 10th weekly rise. [EIA/S]

Further support came on Wednesday from the International Energy Agency (IEA). Although inventories rose in January, the agency said the market could be in deficit by 500,000 barrels per day (bpd) in the first half of 2017.

OPEC has broadly complied with its commitment to cut 1.2 million bpd in the first half of the year, but investors have been unnerved as stocks have kept climbing. The IEA called for patience, saying cuts would take time to feed through. [IEA/M]

Thursday's price rise seemed largely powered by a dip in the dollar, helping commodities across the board. A decline in the U.S. currency makes dollar-denominated commodities less expensive for holders of other currencies.

OPEC has said it wants to see inventories fall below the five-year average for industrialised nations. Stephen Brennock of PVM brokerage said this would be achieved only if OPEC kept supply reductions beyond the first half of 2017.

"Unless OPEC agrees to extend its self-imposed production restraint beyond the June deadline, any claims of victory in the battle against the glut will be premature," Brennock said.

OPEC member Kuwait said this week that it was ready to prolong the deal to reduce supply. But OPEC heavyweight Saudi Arabia, the world's biggest exporter, has said it is too early to consider an extension.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Christopher Johnson and Dale Hudson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22