Oil prices move higher on weaker dollar, hold above three-week low

By Keith Wallis
SINGAPORE, Oct 22 (Reuters) - Oil prices edged up in Asian
trade on Thursday, gaining support from a weaker dollar to hold
above a three-week low hit in the previous session after a
bigger-than-expected build in U.S. crude stocks added to
concerns of a global oil glut.
Brent LCOc1 for December delivery rose 25 cents to $48.10
a barrel by 0434 GMT. The global crude benchmark finished down
86 cents, or 1.8 percent, on Wednesday, after hitting $47.50,
its lowest since early October.
U.S. crude CLc1 for December delivery climbed 23 cents to
$45.43 a barrel, having settled down $1.09, or 2.4 percent, in
the previous session. It earlier hit a three-week low of $44.86.
The higher values came as the dollar index .DXY fell
against a basket of six major currencies on Thursday. A weaker
dollar makes dollar-denominated commodities, including oil,
cheaper for buyers using other currencies.
Still, analysts said the support from the dollar was
unlikely to signal an end to the downward trend in oil prices.
"I wouldn't want to conclude there is a real bounce going
on," said Ric Spooner, chief market analyst at Sydney's CMC
Markets. "I'd like to see U.S. crude go beyond $46 a barrel to
conclude the downtrend had finished."
Oil prices came under renewed pressure from worries about a
global glut this week after U.S. crude inventories rose more
than twice what analysts had expected. urn:newsml:reuters.com:*:nL1N12L19S
U.S. crude stocks surged sharply for a second week, climbing
8 million barrels in the week to Oct. 16, data from the U.S.
Department of Energy's Energy Information Administration (EIA)
showed on Wednesday. EIA/S
That jump followed a rise of more than 7.5 million barrels
in the previous week and put U.S. crude stocks up more than 22
million barrels over the last four weeks.
This will keep oil prices bouncing around support levels of
about $48-$56 a barrel for Brent and $43.50-$50 a barrel for
West Texas Intermediate, said Mike McCarthy, chief market
strategist at CMC Markets.
"There is no clear direction," McCarthy said.
Commodity markets, including oil, have gained some relief
from recent China data that indicate economic problems in the
world's second largest economy are not as great as some people
expected, Spooner said. urn:newsml:reuters.com:*:nL8N12L4V1
China's third quarter GDP growth was 6.9 percent, slightly
ahead of forecast of 6.8 percent, according to data this week.
urn:newsml:reuters.com:*:nL3N12J1EK
Investors are also looking ahead to next week's Federal
Reserve open market meeting on Oct. 27-28 to see if there are
any policy changes on the dollar, Spooner said.
Oil experts from the Organization of the Petroleum Exporting
Countries and non-member countries made no agreement this week
to take steps to boost prices, officials said after talks in
Vienna on Wednesday. urn:newsml:reuters.com:*:nL8N12L22V