Oil prices rise on weak dollar
NEW YORK: Oil prices edged up Thursday amid a weakening dollar and falling crude inventories in the United States, the world’s largest oil-consuming nation.
Market sentiment was also boosted by International Energy Agency forecasts of higher global oil demand and OPEC’s decision to maintain output quotas.
New York’s main contract, light sweet crude for October delivery, ended 63 cents higher from Wednesday’s closing price at 71.94 dollars per barrel.
London’s Brent North Sea crude for October delivery added three cents to 69.86 dollars.
A weekly government report showing easing crude inventories and higher gasoline and other stockpiles in the United States lifted market sentiment, analysts said.
Crude inventories fell by 5.9 million barrels last week, nearly four times more than expected, data from the US Energy Information Administration said.
But gasoline stockpiles unexpectedly rose 2.1 million barrels — analysts had forecast a drop of 1.3 million barrels — and distillate stocks, including diesel and heating oil, rose two million barrels, more than the expected 600,000 barrels.
“That’s very bullish because the biggest weakness in the global oil market has been the US market,” independent trader Ellis Eckland said.
He added that the weakening dollar as well as the rising stock market added to market optimism. “If the dollar continues to weaken, for sure oil will go above 75 (dollars per barrel),” Eckland said.
The dollar fell to a new 2009 low against the euro Thursday as investors moved away from the safe-haven greenback to riskier currencies.
The International Energy Agency raised its forecasts for global oil demand in 2009 and 2010 largely because of stronger-than-expected economic data from China and the United States.
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