|
The
dollar rose to a 14-year high against a basket of other
currencies after the U.S. Federal Reserve raised rates for the
first time in a year on Wednesday.
A stronger dollar, in which oil is traded, tends to hit crude
demand as it makes fuel purchases more expensive for users of
other currencies.
North Sea Brent crude oil was up 45 cents at $54.35 a barrel by
1030 GMT. U.S. light crude oil was up 20 cents at $51.24 per
barrel.
"We got sold off because of the strong dollar, but any weakness
should be temporary," said Tamas Varga, senior market analyst at
brokerage PVM Oil Associates in London.
"The market has faith in the OPEC/non-OPEC deal," he added.
The Organization of the Petroleum Exporting Countries and other
producers led by Russia have promised to cut production by
almost 1.8 million barrels per day (bpd) in an attempt to clear
a global oversupply that has depressed prices for more than two
years.
ANZ bank said on Thursday oil markets would move into a
substantial deficit in the first quarter of 2017 if OPEC and
other producers reduced output as promised.
"This will likely push oil prices well above $60 per barrel
early next year," ANZ analysts said in a note to clients.
Oil companies have slashed costs in order to survive the low
price environment, industry data show.
"2017 will be the third year investments go down, with 3 percent
(declines). You need to go back to the '80s to see three
consecutive years of investment cuts," said Audun Martinsen,
vice president for Oilfield Service Research at Rystad Energy.
Crude prices received some support from reports of falling U.S.
crude inventories.
U.S. Energy Information Administration (EIA) data showed that
commercial crude inventories last week declined by 2.56 million
barrels to 483.19 million barrels.
(Addition reporting by Henning Gloystein and Keith Wallis in
Singapore; Editing by Jason Neely)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
|
