Oil Prices Higher As Dollar Takes A Breather

Benchmark U.S. crude-oil futures rose in electronic trade Tuesday, finding some relief from a softening in the U.S. dollar.

During Asian trading hours, crude oil for June delivery  picked up 22 cents, or 0.2%, to $95.39 a barrel.

The move slightly pared Monday’s loss of 87 cents, or 0.9%, on the New York Mercantile Exchange, where the contract settled at $95.17 a barrel, the lowest since May 2.

On Tuesday, the dollar

dipped against the Japanese yen, and the euro rose ahead of the release of euro-zone economic data.

Oil and other dollar-denominated commodities tend to benefit when the dollar weakens, as it makes them less expensive for holders of other currencies.

But oil prices suffered Monday as the dollar strengthened, and amid concerns about rising output from key oil producers.

Oil production from the Organization of the Petroleum Exporting Countries rose by 250,000 barrels a day in April from a month earlier to 30.5 million barrels per day, according to a Platts survey of OPEC and other oil-industry officials and analysts, released Monday.

The survey showed production is running about 500,000 barrels a day above the cartel’s 30 million barrel-per-day output ceiling. The report arrived ahead of OPEC’s meeting on May 31.

Later Tuesday, the International Energy Agency is slated to release its medium-term oil outlook report, and the American Petroleum Institute is due to publish its weekly report on U.S. crude-oil supply. The API’s report will be followed by supply data from the U.S. Energy Information Administration on Wednesday.

Analysts polled by Platts expect crude stockpiles to continue to push to record levels, with an expected build of 300,000 barrels in the week ended May 10. U.S. commercial crude stocks were at 395.514 million barrels for the week ended May 3, more than 9% higher than the EIA’s five-year average, Platts said in a statement.

Also, gasoline stocks are expected to have declined 800,000 barrels last week, while distillate stocks likely rose by 800,000 barrels.

Elsewhere in the energy complex on Tuesday, London-traded benchmark Brent crude oil for June  was up 1 cent at $102.83 a barrel.

Meanwhile, natural gas for June delivery  edged up less than 1 cent, or 0.1%, to $3.93 per million British thermal units.

June heating oil   was unchanged at $2.89 a gallon, and June gasoline  gained 1 cent, or 0.3%, to $2.83 a gallon.