Oil rises a fourth day as dollar weakness counters supply gains

Oil rose a fourth day in New York as a falling dollar, which bolsters crude's appeal to investors, outweighed speculation that a supply glut in the US is expanding.

Futures climbed as much as 1.5 per cent in New York and London. The US currency slipped against most of its major counterparts and the Bloomberg Dollar Spot Index lost 0.4 per cent. Crude inventories probably climbed for an 11th week in the seven days ended March 20, according to a Bloomberg survey before an Energy Information Administration report on Wednesday.

West Texas Intermediate oil fell 10 per cent this year as US supplies and output grew to the highest level in more than three decades. The Organization of Petroleum Exporting Countries, which resisted calls to reduce production at a November meeting, will probably maintain its collective quota when it next meets in June, according to Facts Global Energy, a research company.

"The falling dollar is boosting commodities, irrespective of their fundamentals," Bill O'Grady, chief market strategist at Confluence Investment Management in St Louis, which oversees $3.4 billion, said. "The financial guys are in control at the moment but I think the commodity folks will reassert themselves because they have the fundamentals behind them. A weaker dollar isn't going to resolve the US storage problem."