U.S. oil hits one-week high as dollar sags; many Asian markets shut
U.S. crude extended gains in subdued trade on Friday as the dollar slipped to a three-year low, with many Asian markets closed for the Lunar New Year holiday.
NYMEX crude for March delivery CLc1 was up 17 cents, or 0.3 percent, at $61.51 a barrel by 0750 GMT, after earlier touching a one-week high of $61.82. For the week, the contract has risen about 4 percent after losing nearly 10 percent last week.
London Brent crude LCOc1 was up 25 cents, or 0.4 percent, at $64.58 after settling down 3 cents. Brent is up nearly 3 percent for the week after falling more than 8 percent last week.
“Oil is getting support from a rebound in global stock markets and a weak dollar, but the upside is limited due to a projection for rising U.S. production,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.
“The market is quiet due to a slew of holidays in Asia.”
The dollar slipped to a three-year low against a basket of currencies on Friday. A weaker dollar often boosts prices for oil and other dollar-denominated commodities.
Asian shares rose for a fifth straight day on Friday as investor confidence slowly returns after a sharp sell-off earlier in the month.
Oil producers led by Saudi Arabia and Russia aim to draft an agreement on a long-term alliance by the end of this year, United Arab Emirates energy minister Suhail al-Mazroui said on Thursday.
OPEC and non-OPEC producers including Russia have been restraining production by a total 1.8 million barrels per day (bpd) in a bid to prop up prices under a deal that is to expire at the end of 2018.
The move comes at a time when Asian demand is on the rise. India imported a record 4.93 million bpd in January to feed its expanded refining capacity and meet rising demand, data showed.
Oil won support earlier in the week after Saudi Energy Minister Khalid al-Falih said OPEC hopes to keep limiting crude output to leave the market tight.
However, surging U.S. production is offsetting OPEC’s efforts to curb supplies. U.S. crude output hit a record 10.27 million barrels per day last week, the Energy Information Administration (EIA) said on Wednesday, making it a bigger producer than Saudi Arabia.