Oil prices rise on dollar slump

6th June 2016, Comments 0 comments

Oil prices pushed higher Monday thanks to a softer dollar caused by last week's disappointing US jobs report, but gains were capped by signs of higher output according to analysts.

At about 1200 GMT, Brent North Sea crude for delivery in August was up 54 cents at $50.18 a barrel.

US benchmark West Texas Intermediate for July delivery climbed 55 cents to $49.17 a barrel compared with Friday's close.

The US currency was sent plunging on Friday after the jobs numbers, making the dollar-denominated currency cheaper for holders of rival currencies.

The US Labor Department on Friday said that just 38,000 jobs were created last month, a quarter of what had been expected by financial markets.

With a US interest rate rise not now seen before September at the earliest, the dollar in turn tumbled, before recovering in early trading on Monday.

IG Markets analyst Bernard Aw meanwhile noted that current oil price movements were "not in proportion to the dollar retreat".

He added: "One would have expected oil prices to push much higher than what we're seeing... traders might be waiting for news more related to oil itself" such as the supply-demand picture.

The market was reacting also to the Baker Hughes weekly North American rig count that showed an increase of nine onshore oil drilling platforms in the US.

Friday's update came after the refusal last week by export cartel OPEC to agree output limits.

With oil prices up about 85 percent from the near 13-year lows touched at the start of the year, the Organization of Petroleum Exporting Countries did not feel a need to alter current production policy.

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© 2016 AFP

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