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Stumbling dollar lifts oil prices, but uptick in U.S. drilling caps gains

Published 2016-06-05, 08:26 p/m
© Reuters. Stumbling dollar lifts oil prices, but uptick in U.S. drilling caps gains
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By Henning Gloystein
SINGAPORE, June 6 (Reuters) - Oil prices edged up in early
trading on Monday as a plunge in the U.S.-dollar was seen
spurring fuel demand, although traders said plentiful supplies
capped increases.
International Brent crude futures LCOc1 were trading at
$49.91 per barrel at 0014 GMT, up 27 cents from their last
settlement, and U.S. West Texas Intermediate (WTI) crude futures
were up 28 cents at $48.90 a barrel.
Traders said that the higher oil prices were largely a
result of a sharp fall in the dollar on Friday, when the
greenback lost over 1.5 percent intra-day against a basket of
other leading currencies .DXY .
The drop followed weak U.S. jobs data that sparked concerns
over the state of the world's biggest economy, but a weaker
dollar is seen as supporting fuel demand in the rest of the
world as it makes dollar-traded oil imports cheaper.

"The weaker U.S.-dollar drove commodity prices higher," ANZ
bank said on Monday.
Traders said frequent attacks on oil infrastructure in
Nigeria, which has already pulled the country's output to over
20 year lows and which rebels said could fall to zero soon, were
also supporting oil prices.
However, the price rally was capped on signs of increased
output.
U.S. energy firms this week added rigs drilling for oil for
the second time this year, energy services company Baker Hughes
Inc BHI.N said on Friday, as producers cautiously upped
activity following months of rising prices.
Drillers added nine oil rigs in the week to June 3, bringing
the total rig count up to 325, compared with 642 a year ago,
Baker Hughes said in its closely followed report.

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