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Oil rise due to United States inventories and dollar fall

Oil prices grow for a second consecutive day on Thursday, contributed by U.S. data that crude inventories had fallen after rising for nine weeks and U.S. dollar weakening after the Fed indicated it would not raise rates faster than expected. 

Brent crude oil rose 38 cents at $52.19 a barrel after prices Tuesday's prices to $50.25, which was the lowest since November 30, 2016, when OPEC announced plans to reduce supplies.

U.S. light crude oil rose 37 cents at $49.23 a barrel, starting rise after a three-month low.

The rebound has been cautious and investors waiting for results of OPEC's cuts and other producers which support this agreement entered into force on January 1, 2017.

"The dollar is weak because of Fed. I don't think that it will be enough because we need something more substantial," said Olivier Jakob of Swiss consultancy Petromatrix.

The United States Energy Information Administration said on Wednesday that crude oil inventories fell 237,000 barrels for the week ended March 10, contrary to the forecast of a 10th weekly growth.

OPEC has complied with its obligation concerning reductions of oil production in the first half to 1.2 million barrels per day, but investors have been not involved, as stock kept climbing. The IEA called for patience, saying that cuts will take time.

Oil prices growth on Thursday and it seemed, to a large extent were fueled by the U.S. dollar decline.

"In case if OPEC agree to extend the agreement for cuts oil production beyond June deadline, any claims to victory in the battle against excess oil cuts will be premature," said Stephen Brennok of brokerage PVM Oil Associates Ltd in London.

OPEC member Kuwait said this week that it was ready to extend the deal, but Saudi Arabia, the world's largest oil exporter, said it is too early to consider the extension of the agreement.

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  • avatar-2117
    AL Davis
    • #

    I think that the contract extension will not help to stop the oil collapse.

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