Oil prices rebound from mid-morning losses to trade slightly higher as steady global demand offset a stronger dollar as a public holiday in the US and most of Europe kept the volume that exchanged hands during the session low.
Crude prices opened lower in the day as the dollar firmed up against a basket of other currencies on worries over Greece.
A stronger dollar is bearish for oil and other dollar denominated currencies as it makes it expensive for holders of other currencies.
The market however drew support from data showing bullish demand for the commodity in the United States and across the USA.
“Global oil demand continues to surprise to the upside, with April data showing no signs of slowdown despite a pick-up in prices,” Energy Aspects told Yahoo News.
Light Sweet crude for July delivery most recently gained 10 cents or 0.7% at $59.71 barrels during the Globex Electronic session on the New York Mercantile Exchange. The US most active contract lost 1.4% last week to snap a three week winning run.
Brent futures, the global benchmark, most recently advanced by 50 cents or 0.81% at $65.17 a barrel on the London Based ICE futures Exchange. The global benchmark had traded 0.2% lower in earlier trading on dollar strength.
Analysts, however, expressed concern that US shale production would rebound quickly after data by the Energy Information Administration showed that active oil rigs in the US fell by just one last week.
“For oil, the burden of proof has shifted to how U.S. producers will respond to the recent rally and whether low-cost producers can sustainably deliver higher production,” analysts at Goldman Sachs told Market Watch in a report over the weekend.
Also aiding the oil rally were reports of intensification of the unrest in the Middle East after Islamic fighters poured fighters in the Iraqi city of Ramadi.
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