Oil prices inched up as the dollar weakened to offset losses earlier in the day caused by comments by Saudi Arabia that it would maintain its crude production levels despite a global oversupply in the commodity.
Light Sweet oil for May delivery edged up 58cents or 1.2% to $17.15 in the New York Mercantile Exchange. Futures ranged between $45.33 and $47.22. Total volume traded on Monday was 33% below the 100-average for the exact time of day.
The April contract reached expiry on Friday after advancing $1.76 on the day to close at $45.72.
Brent, the global benchmark, closed 83cents or 1.5% higher to $56.15 on the London based ICE Futures Exchange.
Oil prices have in recent trading sessions over increasing concerns of oversupply in the commodity and slack demand. They were, however, boosted by a weakening in the dollar against major currencies after the Federal Reserve indicated on Wednesday that it was in no hurry to raise the interest rates.
“Prices are up from the lows because of the weakening dollar,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, told Bloomberg by phone.
“There’s a strong reverse correlation between oil and the dollar, and we’re seeing it at work today.”
Data from oilfield services provider Genscape Inc also indicated that stockpiles in Cushing Oklahoma, an important delivery and storage site for the benchmark WTI crude, grew less last week than in previous weeks.
This good news helped pare overnight losses from an announcement from Riyadh that the country was producing 10 million barrels per day; the most since July when prices commenced their slide.
The country vowed not to effect any cuts on its oil production unless other OPEC members did.
“We repeat that, as for prices, the market determines it,” Influential Saudi oil minister, Ali Al Naimi, said on Sunday, according to Reuters.
“We tried, we held meetings and we did not succeed because countries (outside OPEC) were insisting that OPEC carry the burden (of cuts) and we refuse that OPEC bears the responsibility,” Naimi said.
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