Fin24

Oil rises amid weaker dollar

2011-05-18 09:31

Singapore - Oil prices rose to near $98 a barrel Wednesday in Asia as the dollar weakened and a crude supply report showed mixed signs about U.S. demand.

Benchmark crude for June delivery was up 96 cents to $97.87 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost 47 cents to settle at $96.91 on Tuesday.

In London, Brent crude for June delivery was up 69 cents to $110.68 a barrel on the ICE Futures exchange.

The American Petroleum Institute said late Tuesday that crude inventories rose 2.7 million barrels last week, more than the increase of 500 000 barrels predicted by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.

However, inventories of gasoline, which have dropped 12 straight weeks, fell by 676 000 barrels last week and distillates dropped 2.8 million barrels, the API said.

The Energy Department's Energy Information Administration reports its weekly supply data later Wednesday.

A weaker US dollar, which makes oil less expensive for investors with other currencies, helped push crude higher.

The euro rose to $1.4278 on Wednesday from $1.4236 late Tuesday while the dollar slid to 81.12 yen from 81.43 yen.

Oil has dropped from near $115 on May 2 amid investor concern global demand is waning. Traders are worried that recent Chinese efforts to contain inflation by raising lending rates will slow economic growth and commodity consumption.

"Expectations that buoyant Chinese demand will drive commodity prices ever higher have been looking increasingly shaky," Capital Economics said in a report. "China's imports of many key commodities have actually been falling in recent months."

In other Nymex trading in June contracts, heating oil rose 3 cents to $2.87 a gallon and gasoline gained 3 cents to $2.95 a gallon. Natural gas futures increased 1.4 cents to $4.20 per 1 000 cubic feet.