Oil Prices Climb On Pressured Dollar

Oil prices climb on pressured dollar

LONDON, (APP - UrduPoint / Pakistan Point News -7th Sept,2016) - Oil prices advanced on Wednesday thanks to a weaker Dollar but scepticism that key producers would agree to limit output at an upcoming meeting kept gains in check, traders said.

The dollar has been hit by data Tuesday showing a sharp fall in the key US services sector, virtually wiping out any possibility of an interest rate hike this month from the Federal Reserve. The figures followed below-forecast readings on factory activity and jobs growth, hitting the greenback and in turn making dollar-denominated crude cheaper for holder of rival currencies.

Around 1630 GMT, US benchmark West Texas Intermediate for delivery in October was up 56 cents at $45.39 a barrel. Brent North Sea crude for November delivery grew 64 cents to stand at $47.90 a barrel compared with the close on Tuesday.

With three weeks until a meeting in Algeria, oil traders are keeping tabs on Russia and OPEC, hoping for signs they will find an agreement to address a global supply glut that has hammered prices for two years.

On Tuesday Iranian President Hassan Rouhani said his country is committed to help stabilise the oil market after meeting OPEC chief Mohammad Sanusi Barkindo. His comments came after OPEC kingpin Saudi Arabia and Russia said Sunday they would work together to boost the oil market, but stopped short of committing to a production freeze.

The vague remarks coming from officials have fuelled doubts that the Algiers gathering will end in a deal. CMC Markets senior sales trader Alex Wijaya told AFP: "The main challenge is them having to convince the market that this is not empty rhetoric." Oil has been dogged by a stubborn supply glut since late 2014, which saw prices dip to near 13-year lows below $30 earlier this year.

The previous attempt at reaching an output deal in April was scuppered by Iran's refusal to agree to any freeze as it emerges from years of nuclear-linked Western sanctions. Official figures on US stockpiles are due for release on Thursday, a day later than usual owing to the Labour Day holiday earlier this week.