Oil prices edge up on weaker dollar, financial investments

By Henning Gloystein
SINGAPORE, March 11 (Reuters) - Crude oil prices edged up in
early trading on Friday supported by a weaker dollar, which
makes oil cheaper for countries using other currencies, and
investment money.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were
trading at $38.11 per barrel at 0048 GMT, up 27 cents from their
last close.
Traders said that the price support came from a weaker
dollar, which on Thursday fell by 2.5 percent against a basket
of currencies .DXY in volatile trading after the European
Central Bank eased aggressively.
A weaker dollar can be seen as supportive for oil prices as
it makes dollar-traded oil cheaper for countries using other
currencies, potentially spurring fuel demand.
Traders said prices also received support from fund money
flowing into oil markets.
"The funds have turned bullish and the market seems
determined to stay at or around $40," said Pete Donovan, broker
at Liquidity Energy in New York.
Friday's stronger prices came following losses the previous
day after a meeting between major producers to coordinate a
freeze in output looked unlikely to even take place without Iran
committing.
Freed from international sanctions that more than halved its
output to little more than 1 million barrels per day (bpd), Iran
said it would not participate in a proposed agreement between
top producers Saudi Arabia and Russia to freeze production at
January levels, when both pumped over 10 million bpd.

Because a global glut in supply, which sees over 1 million
barrels of crude produced every day in excess of demand and
which has left storage tanks around the world brimming with
unsold oil, analysts say that a fundamental reduction in
supplies, for instance through a production cut, must happen
before prices go much higher.
"Supportive fundamentals will be needed to drive prices
higher," ANZ bank said on Friday, but added that these
fundamentals were currently not visible as "the chances of any
production cut announcements are weak and Iran looks committed
to expand oil output."