Oil extends gains, nears $102

Font Size

Print

Feedback

Email

Discuss

Save & Share Article

What’s this?

Digg	My Yahoo	Fark
del.icio.us	Newsvine	Reddit

Rate This Article

Perth, March 26: Oil rose further on Wednesday as a weakening dollar and souring consumer sentiment in the United States spurred buying in energy Markets.

US light crude for May delivery rose 68 cents to $101.90 a barrel by 0526 GMT, extending a 36-cent gain in the previous session that ended a week of heavy sell-offs.

London Brent crude rose 49 cents to $101.09.

"The dollar's fall has prompted buying but traders are reluctant to take large positions ahead of the end of the quarter," said Shuji Sugata, a manager at Mitsubishi Corp Futures and Securities Ltd in Tokyo.

"Crude is gaining support as equities prices are regaining stability, but the technical trend is still weak after plunging from record highs last week," Sugata said.

The dollar was little changed on Wednesday, after falling in New York trade as investors seized on a rebound in gold and commodity prices as a cue to sell the US currency

Renewed calm in financial Markets also prompted players to sell the US currency and buy gold and oil, betting that the global Economy will withstand an economic slowdown in the US

Analysts said news that a worker strike in Gabon had halted 60,000 barrels of daily output from a Shell subsidiary in the West African nation also encouraged oil's gains

The market is now shifting its focus to the US government's weekly report on crude oil inventories to be released at 1430 GMT.

Oil analysts polled by Reuters expect this week's government data to show a third consecutive increase in weekly US crude oil stocks, up 1.7 million barrels. Gasoline stocks were forecast to show a draw of 800,000 barrels, while distillate stock were seen to fall 1.7 million barrels.

Oil's modest gain on Tuesday snapped a three-day losing streak that saw oil prices tumble about 10 percent in a week after striking a lifetime high of $111.80 on March 17.

But some analysts said the recent correction in oil prices could continue due to a bleak US economic outlook, seasonal weakness in crude demand on the back of a heavy refinery maintenance schedule and weaker oil products demand as the winter season ends.

Reports on Tuesday showed US consumer' confidence plunged to a five-year low on worries about rising inflation and fewer jobs, with a record drop in house prices in January compounding their woes.