Brent crude rebounds to $57 a barrel on weak dollar
24 Mar 2015
Bent crude rebounded to levels around $57 a barrel on Tuesday on the back of weak dollar, after slipping to $56 a barrel on Monday, despite all-time high oil production in key producer Saudi Arabia and a slowing Chinese economy.
The US currency slipped 0.25 per cent against the euro, extending losses from the previous session, which helped to reduce dollar-priced commodities.
Brent futures for May delivery were trading 64 cents higher at $56.56 by 0620 EDT while US sweet light crude rose 60 cents to $48.05 a barrel. Its discount to Brent, however, widened to $8.51 a barrel.
On Monday, Brent crude oil held below $56 a barrel on signs of slowing growth in China and with Saudi Arabia pumping crude at levels close to an all-time high.
Industrial activity in China, the world's largest oil importer and the second-largest economy, slipped in March with the HSBC/Markit purchasing managers' index falling to 49.2, below the 50-point level.
Brent futures for May were trading down 20 cents at $55.72 at 0856 GMT, while US sweet light crude dropped 31 cents to $47.14 a barrel.
Tuesday's gains were capped by data showing factory activity in China, the world's second-largest economy and top oil importer, slipped in March.
The Chinese data followed comments from OPEC kingpin Saudi Arabia that it is pumping around 10 million barrels of crude per day, close to an all-time high and some 350,000 bpd above the figure it gave OPEC for its February output.
OPEC's decision to keep oil flowing and keep its share of the market has resulted in a flooding of the market and a subsequent halving of oil prices since June.
The market expects oil prices to come down in the Northern Hemisphere in the second quarter as winter fuel demand wanes with the slowing of driving activity. Energy consultancy FGE forecasts a global surplus of 2 million barrels per day between April and June.
US crude stocks, which already hit their highest in at least 80 years, were forecast to rise further.
Meanwhile, the international crude oil price of Indian basket stood at $52.83 per barrel on Monday, down from $52.50 per barrel on previous publishing day of Friday (20 March 2015).
In rupee terms, the price of Indian basket of crude increased to Rs3,290.78 per barrel on Monday, compared to Rs3,280.73 per barrel on Friday.
The rupee closed stronger at Rs62.29 per US dollar on Monday against Rs62.49 per dollar on Friday.