Oil prices rallied after the dollar weakened, following a weaker than expected private jobs report and talks on a possible Iran nuclear deal dragged on past the self imposed deadline.
The dollar slipped against other major currencies including the Euro making commodities denominated in dollars cheaper to holder s of other currencies after a report showed that private employers added fewer than expected employees in March.
Light, sweet crude oil for May delivery on the New York Mercantile Exchange most recently gained $1.73 or 3.55% to trade at $49.27 a barrel.
The American benchmark had, capped its longest run of quarterly losses since 2003 amid speculation that Iranian oil exports would worsen the global oil glut.
“Attention is focused on the latest headlines from the Iran talks,” Phil Flynn, senior market analyst at the Price Futures Group in Chicago, told Bloomberg by phone.
“The dollar is also at play today. The jobs number showed that hiring cooled off, which lowers the likelihood that the Fed will raise interest rates and as a result has weakened the dollar.”
Brent, the global benchmark, for May delivery most recently gained $1.48 or 2.70% to trade at $56.74 on the London-based ICE Futures Exchange.
Brent reversed morning losses after it emerged that talks on Iran’s nuclear deal would continue well past Tuesday’s deadline curbing expectations that a deal would be reached immediately.
Oil prices have fallen in the last three consecutive quarters with West Texas Intermediate crude declining 10.6% in the January-March quarter while Brent slipped 3.9% in the same quarter. The two benchmarks have fallen 55% and 51% respectively in the last nine months.
Analysts expect the selloff to continue with the April-June quarter expected to be the weakest after which a rebound is expected.
“We expect the support to oil from temporary factors to fade away in Q2, and that a massive U.S. crude oil stockbuild will find its way back to the global market in the form of products in the months ahead,” Barclays analyst Michael Cohen told MarketWatch.
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