NEW YORK:
Oil prices finished mixed Monday in a market held back by a strong dollar and persistent concerns about the global oversupply of crude.
US benchmark West Texas Intermediate (WTI) for delivery in April climbed 39 cents to finish at $50.00 a barrel on the New York Stock Exchange.
In London, Brent North Sea crude for April, the key global futures contract, shed $1.20 to settle at $58.53 a barrel.
“It may be a new week but the crude complex is weighing up the same issues — immediately rising production and inventories versus the potential for rising demand and falling supplies,” said Matt Smith of Schneider Electric.
Both WTI and Brent had scored losses Friday as the dollar soared on a better-than-expected US jobs report that raised expectations that the Federal Reserve will increase zero-level interest rates around mid-year.
A strong greenback makes dollar-priced oil more expensive for buyers using weaker currencies, tamping down demand.
Kyle Cooper of IAF Advisors noted that the spread between the two contracts had recently narrowed from February’s difference of more than $12.
“We’ve seen moves in Brent’s favor for the last few days, and now we’re turning back,” said Cooper, who added he could not explain why WTI was higher.
“I’ve been scratching my head to find something, other than the stronger equities market,” he said. The blue-chip Dow Jones Industrial Average was up nearly one percent in late-afternoon trade Monday.
Phil Flynn of Price Futures Group said the market had found a stable place as it weighs short-term bearish fundamentals with signs pointing to a pick-up in demand later this year.
“While you can’t fight the Fed or the value of the dollar, truth is that with over half the globe stimulating its economy and the US growth set to continue it should bode well for oil demand,” Flynn said in a research note.
