News: Oil prices rise on economic outlook, weak dollar.
NEW YORK (Reuters) – Oil prices rose 2% Thursday on a weaker dollar as fears of soaring US inflation subsided, while a sharp decline in US fuel inventories meant a crude oil glut would be short-lived since Restarting the refineries after a rare freeze in Texas caused outages.
May Brent crude oil futures rose $ 1.53, or 2.3%, to $ 69.43 a barrel by 11:44 a.m. ET (1644 GMT), while US West Texas Intermediate crude oil prices rose $ 1, $ 37, or 2.1%, rose to $ 65.81.
“The complex has recovered to yesterday’s highs thanks to the weak combination of dollars and strong equity,” said Jim Ritterbusch, President of Ritterbusch and Associates.
“We think the energy complex could stay in a stall well into next week, with WTI being roughly limited by parameters of around $ 63 to $ 68 before it rises again.”
US Treasury bond yields fell Thursday as concerns about a sharp rise in inflation subsided and the focus shifted to an auction of 30-year sovereign debt. The dollar fell for a third straight day, hit its lowest level in a week against a basket of currencies.
Less than expected Americans filed new jobless claims last week as an improving public health environment has allowed more industries to reopen.
The massive take-up of US gasoline stocks has also helped boost oil prices, said Tamas Varga, senior analyst at PVM Oil Associates.
“(It) implies that refineries will continue to consume crude oil, which reverses the recent inventory builds we have seen over the past three weeks due to winter storm Uri.”
U.S. gasoline inventories declined 11.9 million barrels to 231.6 million barrels in the week ended March 5, the Energy Information Administration (EIA) said, compared with expectations for a drop of 3.5 million barrels .
However, crude oil inventories rose 13.8 million barrels to 498.4 million barrels in the week ended March 5, compared to analysts’ expectations in a Reuters poll for an 816,000 barrels increase as the country’s oil industry continues to grow The effects of a winter felt the storm in mid-February, which blocked refining and forced production shutdowns in Texas.
Still, the Organization of Petroleum Exporting Countries said in a monthly report that demand will increase by 5.89 million barrels per day (bpd) in 2021, up 6.5% from the previous month. However, the group has cut its forecast for the first half of the year.
Inventories worldwide remain plentiful, according to analysts and ship trackers, as crude oil was stored at key land and sea hubs over the past week.
As the pace of vaccinations has increased, several states such as North Carolina and California have eased COVID-19 restrictions.
Meanwhile, the U.S. House of Representatives on Wednesday finally approved one of the biggest stimulus measures in American history, a $ 1.9 trillion comprehensive COVID-19 relief bill that will give President Joe Biden his first major victory in office.
Additional coverage from Julia Payne and Jessica Jaganathan; Arrangement by Emelia Sithole-Matarise and Chris Reese
Original Source © Reuters