Oil prices edge up on weaker dollar, US inventory data

March 31, 2016 | 10:24

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Oil prices rose slightly on Wednesday helped by official data showing a smaller-than-expected increase in US crude stockpiles as traders worry about the global oversupply.

Oil prices rose slightly on Wednesday helped by official data showing a smaller-than-expected increase in US crude stockpiles as traders worry about the global oversupply. (AFP/Amer Hilabi)

NEW YORK: Oil prices rose slightly on Wednesday (Mar 30) helped by official data showing a smaller-than-expected increase in US crude stockpiles as traders worry about the global oversupply.

The Department of Energy (DoE) reported another rise in US commercial crude stockpiles last week, by 2.3 million barrels. Analysts had expected about three million barrels.

"It wasn't that much but it still puts us at another record level of crude oil and we still have way more than we need," said James Williams of WTRG Economics.

US benchmark West Texas Intermediate for delivery in May edged up four cents to US$38.32 a barrel on the New York Mercantile Exchange. In London, Brent North Sea crude for May delivery, the global benchmark, finished at US$39.26 a barrel, up 12 cents from Tuesday's settlement.

Oil prices also found support in a weaker dollar after Federal Reserve Chair Janet Yellen signalled on Tuesday a cautious approach to US interest rate hikes, making crude priced in the currency cheaper for holders of rival units.

If the oil price "hinges on US dollar weakness, it is not going to go much higher," said Bernard Aw, strategist at traders IG Markets. "In the longer term, it's still a demand-and-supply game. It's still a supply-glut issue. There's only so much the US dollar can do."

Oil prices are down more than 60 per cent from June 2014 largely due to oversupply and slowing economies, particularly China, the world's largest energy consumer.

Major oil producers, led by Russia and Saudi Arabia, will meet in Doha on Apr 17 to discuss measures to stabilise prices, including an output freeze, but the oil market sees an agreement as unlikely.

"This upcoming OPEC-non-OPEC meeting on the 17th is not going to accomplish anything," Williams said.

AFP

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