LONDON — Oil rose above US$42 a barrel on Friday, hitting its highest this season and extending a rally right into a fourth week on expectations of the production freeze by major exporters, stronger seasonal demand and dollar weakness.
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Brent crude’s front-month contract was up 59 cents at US$42.13 a barrel by 1113 GMT, having touched a 2016 high of US$42.31.
U.S. crude gained 64 cents to US$40.84 a barrel after rising as high as $40.93. The benchmark had jumped by 4.5 per cent to close the prior session at US$40.20.
Oil prices have surged by a lot more than 50 per cent from 12-year lows reached in December, bolstered because the Organization of the Petroleum Exporting Countries (OPEC) floated the idea of a production freeze, boosting Brent from about US$27 and U.S. crude from around $26.
Many analysts think there is still steam in the rally.
“We are leaving the period of low demand and beginning to move toward the time when demand increases over the summer,” said Olivier Jakob, oil market analyst at Petromatrix at Zug in Switzerland.
He added that the massive oil glut which had helped to hammer prices this past year at last seems to be stabilizing.
“We’re moving towards taking a look at an old surplus, as opposed to a new one being built up,” he said, adding that it is likely that Brent will stabilize round the mid-US$40s.
Crude inventories in the United States increased by 1.3 million barrels within the week to March 11, to a record a lot of 523.Two million barrels, though which was a significantly smaller build compared to 3.4 million barrels expected by analysts, the Energy Information Administration said on Wednesday.
Analysts asserted dollar weakness seemed to be lifting oil.
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The dollar index is down 3.2 percent to date this month. A weaker dollar makes oil, that is priced in the U.S. currency, less expensive to holders of other currencies.
U.S. oil is heading for a fifth week of gains, while Brent is on course for a fourth weekly increase, a long rising streak in about a year for both benchmarks. Oil is already up 17 percent in March, its strongest monthly gain since last April.
OPEC kingpin Saudi Arabia and non-OPEC producers led by Russia will come across on April 17 within the Qatar capital Doha in an effort to agree the very first global supply offer 15 years.
? Thomson Reuters 2016
