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LONDON, England – Oil prices rose on Friday, March 15, as a weaker US currency made the dollar-priced commodity cheaper, spurring demand, analysts said.
Upbeat employment data in the United States also buoyed sentiment and fuelled hopes that demand will improve in the world’s biggest oil consuming nation.
Brent North Sea crude for delivery in May climbed 67 cents to $109.63 in London midday deals.
New York’s main contract, light sweet crude for April was up 28 cents to $93.31 a barrel.
A weaker dollar “helped to support crude oil prices”, said Ker Chung Yang, senior investment analyst at brokers Phillip Futures.
As oil is traded in dollars, the commodity becomes cheaper when the US currency weakens, prompting investors to buy, and resulting in higher prices.
Oil prices were also supported by data on Thursday, March 14, from the Department of Labor which showed that new US claims for unemployment benefits came in at 332,000 in the week ending March 9, a drop of 10,000 compared with the prior week.
Despite improving sentiment surrounding the world’s biggest economy, energy demand remains downbeat in the US, where on Wednesday, March 13, the Department of Energy said that crude stockpiles rose 2.6 million barrels in the week ended March 8.
Also this week, the International Energy Agency (IEA), which advises a number of countries on energy policy, slashed its global forecast for growth in world oil demand for the second straight month, citing uncertainty from the US budget talks, sluggish Chinese business activity and unemployment in Europe.
The Organization of Petroleum Exporting Countries (OPEC) on Tuesday, March 12, stood pat on its 2013 crude demand forecast, but raised its outlook for production growth by non-OPEC suppliers by 11 percent to 1 million barrels a day.
It expects the growth by non-OPEC suppliers to come mainly from North America.
The cartel, which accounts for around 35% of global supply, expects global demand of 89.7 million barrels per day in 2013, up 0.8 million from 2012. – Rappler.com
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