Oil Up Almost 2% On Weaker Dollar, Short-Covering

Reuters

NEW YORK, June 27 (Reuters) - Oil prices rose nearly 2 percent and hit a one-week high on Tuesday, boosted by a weaker dollar, short covering and expectations that crude inventories in the United States may decline for a third consecutive week.

It was the fourth straight session of gains for oil, which also got some support after the chief executive of U.S. shale oil producer Pioneer Natural Resources Co said Saudi Arabia likely will move to boost oil prices to prop up its finances. Prices pared gains after hours when an industry group's reported an unexpected rise in U.S. crude inventories.

With the end of the quarter approaching, brokers said investors were covering short positions.

Brent crude futures, the international benchmark for oil prices, gained 82 cents, or 1.79 percent, to settle at $46.65 per barrel. U.S. crude futures ended the session up 86 cents, or about 1.98 percent, at $44.24 per barrel.

Brent touched a one-week high of $47.06. U.S. crude hit its highest since June 19 at $44.44.

"I think in the market, over the last four weeks or so, every news item has been uniformly bearish, even the technical situation has been bearish and a lot of the entrenched bulls were really throwing in the towel," said Andrew Lebow, senior partner at Commodity Research Group in Darien, Connecticut.

"The downside momentum was clear and today it just got to a level where it's been arrested for the time being."

After settlement, American Petroleum Institute (API) data showed U.S. crude inventories rose 851,000 barrels in the week to June 23 to 509.5 million. Analysts had forecast a decline of 2.6 million barrels.

On Wednesday morning, the U.S. Energy Information Administration (EIA) will report official inventory data.

The dollar fell more than 1 percent against a basket of currencies.

Commerzbank said in a research note that long positions in Brent on ICE are "at their lowest level in a year and a half," while short positions "have soared to a new record high, having increased more than four-fold since the beginning of the year."

The Organization of the Petroleum Exporting Countries and other producing nations have sought to reduce a global crude glut with production cuts. Yet global crude inventories have not fallen, as the United States and other countries have boosted output.

Ian Taylor, head of the world's largest independent oil trader Vitol, told Reuters Brent prices would stay in a range of $40-$55 a barrel for the next few quarters.

OPEC delegates said the cartel will not rush into further output cuts or end the exemptions some member countries enjoy, although a meeting in Russia next month is likely to consider further steps.


12

View Full Article

Copyright 2017 Thomson Reuters. Click for Restrictions.

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
Project Coordinator
Expertise: Project Management
Location: Los Angeles, 
 
Artificial Lift Systems - Sales Representative V
Expertise: Sales|Wireline
Location: Midland, TX
 
Business Development Specialist
Expertise: Business Development|Sales
Location: Midland, TX
 
search for more jobs

Brent Crude Oil : $55.14/BBL 0.61%
Light Crude Oil : $49.48/BBL 0.86%
Natural Gas : $3.12/MMBtu 0.95%
Updated in last 24 hours