Oil Firms on Weakened Dollar and Improved US Consumer Sentiment

Brent crude futures rose on Friday following three straight lower settlements, heading for a 14 percent quarterly gain on support from a weak dollar and improved U.S. consumer sentiment.

The euro rose against the dollar and the yen as Spain’s budget boosted hopes one of the euro zone’s larger economies would tighten its belt.

The euro had already strengthened against the dollar after euro zone finance ministers agreed to raise their financial firewall.

A weaker greenback can lift dollar-denominated oil by making it less expensive for consumers using other currencies.

U.S. consumer confidence rebounded to its highest in 13 months at the end of this month as optimism about jobs and income overcame higher prices at the gasoline pump.

The consumer optimism and a separate report showing consumer spending in February increased by the most in seven months helped counter data showing U.S. Midwest manufacturing activity slowed in March.

Brent May crude rose 92 cents to $123.31 a barrel by 11:25 a.m. EDT (1525 GMT), having swung from $122.58 to $123.80.

U.S. May crude added 57 cents at $103.35 a barrel, having traded from $102.82 to $103.69 and testing resistance above the 50-day moving average of $103.50. U.S. crude was on track to post a 4 percent gain for the first quarter.

Brent’s premium to U.S. crude edged up and reached $20.15 a barrel intra-day.

Total crude trading volumes were tepid, with turnover less than 300,000 lots for Brent and U.S. crude, well under their 30-day averages.

U.S. April RBOB gasoline and heating oil futures edged up also ahead of those front-month contracts’ expiration at the end of Friday’s session, as Reuters stated.

Fears of supply disruption in the Middle East underpinned oil, but gains were capped by expectations that some Western nations will release strategic reserve stocks. Concern also remained over the untamed euro zone crisis.

Comments
Loading...