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Prices of oil gain driven up by low dollar and Middle East tensions

Prices of oil gained nearly 1% today, pushed by a low dollar, the Middle East tensions and worries that Venezuelan production will continue decreasing.

Brent futures reached $66.53 for a barrel, adding 48 cents compared to the last settlement. U.S.

WTI futures moved up to $62.61 per barrel, 55 cents rise. Prices were also driven up by tensions between oil producing states as Saudi Arabia and Iran, wrote Sukrit Vijayakar of Trifecta in a note.

Traders also mentioned general weakness of the U.S. currency .DXY as a factor of growth for oil. Thus a low dollar allows other countries with their own internal currencies import dollar-denominated oil at a cheaper price, which could bring up demand. Concerns of continued decline in Venezuelan oil production gave boost to oil markets as well.

Venezuela, mired in economic crisis has decreased crude output by nearly 50% since the beginning of 2005 to the volume falling short of 2 mln barrels daily PRODN-VE, was obviously vulnerable to a fast fall, and this kind of event could produce deficit in the global markets, according to the last week’s statement by the International Energy Agency.

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