NEW YORK/LONDON: Brent crude oil futures rose yesterday morning during trading in New York, supported by a weak dollar and a supply outage in North Sea crude oil.
Oil producer Nexen confirmed its North Sea Buzzard oil field, which supplies Forties, the leading stream behind the Brent benchmark, was shut, supporting prices. The oil field was expected to return to normal by next week.
“I see the Buzzard field issue as leading the way with Brent pushing higher,” said New York analyst Dominick Chirichella.
A weaker dollar helped support higher oil prices. Oil is priced in dollars and when the dollar sinks, oil becomes less expensive for holders of other currencies. The dollar index against a basket of currencies was trading one percent lower.
Brent crude futures were trading $1.86 higher at $102.25 per barrel at 11.40am EDT (1540GMT), rebounding from a slip below $100 to $99.66 earlier in the session on weak Chinese data. That was the lowest price for Brent in one month. US crude oil futures were trading $1.44 higher at $93.41.
Analysts said slow demand growth with robust supplies would cap gains in oil prices. Record high US supplies and a weak global economic outlook has kept a lid on prices.
Brent crude was rising off of three previous sessions of losses, but was still only able to touch the 10-day moving average on the high end of the session. Brent has fallen for four straight months from a high of $119.17 in February.
US crude oil futures were trading just above the 40-day moving average, remaining below short-term moving averages on a continuation chart.
Oil was also supported by flooding across Europe, which halted barges along the river Rhine, and by supply worries after reports that Iran aimed next year to start a nuclear reactor, which the West fears could arm an atomic bomb. A triple whammy of weak overall manufacturing data in the US, Europe and China both served to support oil prices and prevent them from rising too much.
Reuters
