Crude oil rises as dollar weakens
Crude oil traded above $82 a barrel in New York, poised for a second weekly gain, as the dollar weakened and the IEA bolstered its outlook for oil demand.
The International Energy Agency raised its forecast for global oil demand this year for a second month as consumption in Asia rises more than expected.
The dollar weakened, raising the appeal of crude for hedging inflation, and European stocks rose, extending the Stoxx Europe 600 Index’s second weekly advance.
“Oil is being helped by a weaker dollar and a somewhat friendlier equity market,” said Eugen Weinberg, analyst at Commerzbank AG in Frankfurt.
“But the gains aren’t going to last. Demand from refineries is still very low and prices are way too high for demand to recover strongly.”
Crude oil for April delivery rose as much as 65 cents, or 0.8pc, to $82.76 a barrel in electronic trading on the New York Mercantile Exchange.
It was at $82.69 at 10:27am in London. Brent crude for April delivery rose 59 cents to $80.87 a barrel on London’s ICE Futures Europe exchange.
The dollar weakened for a third day against the euro, enhancing the appeal of commodities. The US currency was at $1.3780 per euro, from $1.3681 yesterday in New York.
The IEA increased its estimate for oil demand in 2010 by 70,000 barrels a day to 86.6 million barrels. That would mean a gain of 1.6 million barrels a day, or 1.8pc, from 2009 levels, the IEA said.
Economies outside the Organization for Economic Cooperation and Development continue to lead the recovery, the group said.
Oil rose 2 cents to $82.11 in New York yesterday, the highest settlement since January 11. Futures are poised for a weekly gain of 1.4pc, after rising 2.3pc last week.
The Organization of Petroleum Exporting Countries (OPEC) will maintain existing production quotas next week as prices hold above $80 a barrel and the group awaits further confirmation of a recovery in demand, according to a Bloomberg News survey.
OPEC, a 12-member group that pumps 40pc of the world’s oil, will increase shipments on strong demand in China, according to consultant Oil Movements.
It will raise exports by sea to 23.2 million barrels a day during the four weeks ending March 27, up 0.9pc from the period to March 20, the tanker-tracker said yesterday.
Oil may fall next week on rising US inventories and speculation that demand will decrease next month, according to a Bloomberg News survey.
Twenty-three of 50 analysts and traders, or 46pc, said oil will decline through March 19.
Fourteen respondents, or 28pc, predicted futures will increase and 13 said prices will be little changed.
Last week, 38pc of respondents surveyed forecast a price gain and an equal number a decline.