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Analysts at Sucden Financial pointed to a softer dollar
boosting buying on Thursday in a note to clients. A weaker U.S.
unit makes dollar-priced commodities such as oil cheaper for
holders of other currencies.
March Brent futures <LCOc1> were up $1.13 at $55.79 a barrel by
1307 GMT (08:07 a.m. EST), following a 3 percent loss in the
previous session that saw prices break below $54 at one point.
U.S. March crude futures <CLc1> were trading up $1.25 at $50.09,
after falling more than 2 percent in the previous session.
Volatility in the oil market has jumped to the highest level
since the financial crisis, with prices swinging in a wide range
this month following the near 60 percent crash between June and
January.
The dollar fell 0.34 percent against a basket of currencies
<.DXY>.
"The dollar is weaker against all the commodities at the
moment," said Michael Hewson, chief analyst at CMC Markets.
"We saw a heavy selloff in commodities yesterday and I think
that's why we're getting a little bit of a rebound in oil prices
on the back of that."
French oil major Total <TOTF.PA> announced on Thursday that it
would increase cuts to operational costs to $1.2 billion this
year while spending 30 percent less on exploration, to cope with
weaker oil prices.
Traders have been torn between early signs lower prices will
eventually curb production and indications the market will
remain oversupplied in the first six months of this year.
U.S. crude stocks rose to a record weekly high last week, while
gasoline stocks increased and distillate inventories fell, data
from the Energy Information Administration showed on Wednesday.
"(The rise in prices) is quite surprising," said Carsten
Fritsch, an analyst at Germany's Commerzbank. "Prices have
dropped sharply in the last two days so it may be a bounce back
from that, but the decline was more than justified."
On Thursday, a sandstorm hit Kuwait, a Gulf member of the
Organisation of the Petroleum Exporting Companies (OPEC),
disrupting exports. Kuwait would suspend both its crude and oil
products exports, said a spokesman for state-run Kuwaiti
National Petroleum Company. The suspension will remain until
weather conditions improve.
On Wednesday, Saudi Arabia's oil minister met the chairman of
Russian state-controlled energy giant Gazprom <GAZP.MM>, Saudi
state media said, and discussed cooperation between oil
producers belonging to OPEC and non-members such as Russia.
Saudi Arabia will keep March crude supply to Asia steady,
industry sources told Reuters.
(Additional reporting by Adam Rose in Beijing; Editing by Dale
Hudson and Jason Neely)
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