Oil prices ended higher for the third straight session boosted by weakness in the dollar against other currencies, and speculation that data showed a drop in stockpiles in Cushing.
Light sweet crude for July delivery added 53 cents or 0.9% to settle at a week high $60.45 a barrel on the New York Mercantile Exchange. Based on the most active contracts, this is the highest it has settled since June 11.
Brent crude for August delivery, the new front month contract, jumped 39 cents or 0.6% to end at $64.26 a barrel on the London based ICE futures Exchange.
“The market keeps reverting to the mean, which is $60,” Scott Shelton, oils broker with ICAP in Durham, North Carolina, told Reuters, referring to Thursday’s close in U.S. crude.
“It’s fine if gasoline is going to be the big driver of global oil in the long term but unfortunately, it’s not. It’s just near-term flows or noise that it’s creating,”
The dollar fell against a basket of foreign currencies after the Federal Reserve on Wednesday disappointed investors awaiting a clearer indication on the timing of the rate increase.
The Euro also gained against the dollar on optimism that a possible bailout deal for Greece’s debt crisis would be reached.
“Until we see a resolution with Greece, the volatility in the currency market is really too much for oil,” Matt Smith, director of commodity research for ClipperData, which tracks global crude movement, told the Wall Street Journal.
“We’re very much in a holding pattern.”
A weaker dollar is bullish for the demand of commodities like oil denominated in dollars as it makes them affordable to holders of other currencies.
Aldo aiding the rally were reports by oilfield services provider Genscape Inc that inventories in Cushing, Okla., an important delivery and storage point for the benchmark Nymex contract, had fallen by about 870,000 barrels by Tuesday.
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