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Oil Above $137 on Weak Dollar, OPEC Remarks
: U.S. oil futures jumped more than $4 on Thursday on the weak dollar and after OPEC President Chakib Khelil said in an interview that oil prices could rise to $170 per barrel in the coming months.
Ongoing supply disruptions in Nigeria and a potential widened strike that could shut more production were also in traders' focus.
London Brent crude IPE BRENT CRUDE Future Front Month CGB%40IB.1
137.36 3.03 +2.26% KRF - US
On Wednesday oil fell more than $5 after U.S. weekly oil data showed a drop in gasoline demand and an unexpected rise in crude oil inventories.
Oil trimmed these losses later on Wednesday to settle $2.45 down as the dollar fell to two-week lows versus the euro due to the Federal Reserve's decision to hold key interest rates steady.
"Yesterday's decline would have been far worse if the dollar had strengthened on the back of the Fed decision to keep interest rates unchanged," MF Global said in a research note.
Brokers said investors might see a drop in oil prices from a record high near $140 hit last week as an opportunity to buy.
Oil has risen about 40 percent this year boosted partly by expectations strong demand growth from China and India could tighten supplies in the long term.
But there is some evidence that high prices are having an impact on consumption.
The market continues to watch U.S. economic indicators for signs of faltering demand.
RELATED LINKS
OPEC Chief Sees $170 Oil in Coming Months
Brown: Oil Price Risk to Economy
Nigeria Oil Workers, Chevron to Begin 2-Day Talks
An Easy Way to Trade Oil
Special: Powering the Planet
Energy: Futures & Commodities Figures
"On a four-week average basis, U.S. total product demand is down 680,000 barrels a day (3.2 percent) versus a year ago," Lehman Brothers said in a research note.
"With demand in the rest of the world outside the U.S. growing just 1.2 million b/d and with potential for even lower growth as the removal of subsidies in Asian countries takes effect....the global demand picture could be rapidly approaching zero growth."
Economic data due on Thursday include U.S. final gross domestic product for the first quarter and initial claims for jobless benefits, both at 8:30 am New York time.
Analysts also said instability in Nigeria will continue to support oil prices.
A Nigerian oil workers union and Chevron CHEVRON CORPCVX
99.17 -0.19 -0.19% NYSE
Quote * Chart * News * Profile
[CVX 99.17 -0.19 (-0.19%)] are expected to resume talks on Thursday in a last-ditch effort to avert an all-out strike that could sharply cut output from the world's eighth largest exporter.
Chevron's Nigerian output of around 350,000 barrels per day was reduced by a third last week due to attacks to its pipeline last week, which is a separate incident from the potential
: U.S. oil futures jumped more than $4 on Thursday on the weak dollar and after OPEC President Chakib Khelil said in an interview that oil prices could rise to $170 per barrel in the coming months.
Ongoing supply disruptions in Nigeria and a potential widened strike that could shut more production were also in traders' focus.
London Brent crude IPE BRENT CRUDE Future Front Month CGB%40IB.1
137.36 3.03 +2.26% KRF - US
On Wednesday oil fell more than $5 after U.S. weekly oil data showed a drop in gasoline demand and an unexpected rise in crude oil inventories.
Oil trimmed these losses later on Wednesday to settle $2.45 down as the dollar fell to two-week lows versus the euro due to the Federal Reserve's decision to hold key interest rates steady.
"Yesterday's decline would have been far worse if the dollar had strengthened on the back of the Fed decision to keep interest rates unchanged," MF Global said in a research note.
Brokers said investors might see a drop in oil prices from a record high near $140 hit last week as an opportunity to buy.
Oil has risen about 40 percent this year boosted partly by expectations strong demand growth from China and India could tighten supplies in the long term.
But there is some evidence that high prices are having an impact on consumption.
The market continues to watch U.S. economic indicators for signs of faltering demand.
RELATED LINKS
OPEC Chief Sees $170 Oil in Coming Months
Brown: Oil Price Risk to Economy
Nigeria Oil Workers, Chevron to Begin 2-Day Talks
An Easy Way to Trade Oil
Special: Powering the Planet
Energy: Futures & Commodities Figures
"On a four-week average basis, U.S. total product demand is down 680,000 barrels a day (3.2 percent) versus a year ago," Lehman Brothers said in a research note.
"With demand in the rest of the world outside the U.S. growing just 1.2 million b/d and with potential for even lower growth as the removal of subsidies in Asian countries takes effect....the global demand picture could be rapidly approaching zero growth."
Economic data due on Thursday include U.S. final gross domestic product for the first quarter and initial claims for jobless benefits, both at 8:30 am New York time.
Analysts also said instability in Nigeria will continue to support oil prices.
A Nigerian oil workers union and Chevron CHEVRON CORPCVX
99.17 -0.19 -0.19% NYSE
Quote * Chart * News * Profile
[CVX 99.17 -0.19 (-0.19%)] are expected to resume talks on Thursday in a last-ditch effort to avert an all-out strike that could sharply cut output from the world's eighth largest exporter.
Chevron's Nigerian output of around 350,000 barrels per day was reduced by a third last week due to attacks to its pipeline last week, which is a separate incident from the potential
