Oil prices rose on Thursday, helped by gains in US equities markets and Saudi Arabia’s unexpected hike in crude prices, though crude’s advance was curbed by strength in the US dollar.
Brent crude futures gained 31 cents to settle at $US68.33 a barrel, and US West Texas Intermediate crude rose 17 cents to settle at $US63.54 a barrel.
Oil prices drew support as Wall Street rose. Equities investors shrugged off fears of an escalating trade conflict between the United States and China and looked forward to the quarterly earnings season. US officials said the countries could negotiate.
‘Oil prices are profiting from the general brightening of sentiment on the markets as signs emerge that the trade dispute is easing between the US and China,’ analysts at Commerzbank said in a note.
Saudi Arabia announced that it would increase its official selling prices of May crude, and the move supported prices, said Phil Flynn, analyst at Price Futures Group in Chicago.
‘It’s kind of bullish that they feel like they can justify those higher prices and not lose market share,’ he said.
The strength of the US dollar limited oil’s gains, analysts said. The US dollar rose to its highest in more than one month against a basket of major currencies. Because oil is US dollar-priced, a stronger greenback makes purchases in other currencies more expensive.
Market intelligence firm Genscape said inventories at Cushing, Oklahoma, the delivery point for US crude futures, rose 2.5 million barrels for the week to April 3, according to traders who saw the data.
Wednesday’s weekly inventory figures showed that US crude stocks unexpectedly declined by 4.6 million barrels in the most recent week.
US production hit a new high last week. The extent to which it counterbalance output cuts from the Organization of the Petroleum Exporting Countries (OPEC) will be critical, said Gene McGillian, manager of market research at Tradition Energy in Stamford.
The energy minister of OPEC member Qatar told Reuters that the organisation and its allies should maintain supply cuts, which are set to run until the end of 2018.
Saudi Arabia has said they could be extended in some form into 2019.