Oil Edges Higher on Weaker Dollar

Posted by Joseph Keefe

Dollar retreats from seven-week high; U.S.
inventories rise for eighth straight week.

Oil prices ticked higher on Friday, recouping some of the
previous session's losses, as a weaker dollar encouraged buying
but investors remained cautious after Russian production figures
showed weak compliance with a global deal to cut output.

Global benchmark Brent was up 7 cents at $55.15 a barrel at 1252
GMT, recovering some of Thursday's losses that amounted to more
than 2 percent.

WTI futures traded at $52.64 a barrel, up 3 cents on the previous
close.

"The market is range bound, therefore there is nothing surprising
in seeing fresh buying after a big sell-off and of course the
slightly weaker dollar is also helping oil recover," said Tamas
Varga, senior analyst at London brokerage PVM Oil Associates.

The dollar slipped from a seven-week high on Friday ahead of a
key speech by Federal Reserve chief Janet Yellen.

A weaker greenback makes it more attractive to buy
dollar-denominated currencies like oil futures.

"Because prices have failed once again to rise above their
trading corridors, there is a growing risk of speculative
selling," said analysts at Commerzbank, suggesting further
downside potential.

Oil's gains were capped after concerns remained over non-OPEC
compliance with a global deal to rein in oversupply.

Russia's February oil output was unchanged from January at 11.11
million barrels per day (bpd), energy ministry data showed, with
its cuts from October 2016 levels remaining at 100,000 bpd or a
third of what was pledged by Moscow under its agreement with the
Organization of the Petroleum Exporting Countries.

Official U.S. data also showed crude inventories in the world's
biggest oil consumer rose for an eighth straight week to a record
520.2 million barrels last week.

But even as U.S. oil production rose and Russian output held
steady, OPEC boosted already strong compliance with the group's
six-month deal to 94 percent, cutting output for a second month
in February, a Reuters survey found.

By Karolin Schaps

Mar 3, 2017

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