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Oil gains 1 per cent after US stocks drop for 4th week
[SINGAPORE] Crude futures rose about 1 per cent on Friday after American inventories fell for a fourth straight week although prices are set for a weekly drop on a stronger dollar.
Oil saw steep falls earlier this week as a resurgent dollar weighed on the market amid concerns that US crude supplies may have started rising again after three weeks of draws.
July Brent crude climbed 51 cents to US$63.09 a barrel by 0259 GMT but is set to post losses for a second straight week. Front-month US crude were at US$58.33 a barrel, up 65 cents, yet on track to end a record winning streak.
Wildfires in Canada, which knocked out 10 percent of its oil sands output, also supported prices.
Data from the US Energy Information Administration (EIA) showed on Thursday that crude oil inventories fell by 2.8 million barrels last week, down for the fourth week ahead of Monday's Memorial Day holiday, which unofficially kicked off the peak summer driving season in the United States.
The fall in crude stocks in EIA's data was more than the 857,000 barrels drawdown forecast in a Reuters survey and contrary to the build of 1.3 million barrels estimated by the American Petroleum Institute.
Brent's premium over US prices has come off over 40 per cent since mid-April as Opec maintained production, keeping markets well-supplied.
The group is expected to keep its production quota unchanged when it meets in Vienna on June 5. "With Opec's June 5 meeting right around the corner and no chance of a policy change, we will continue to focus on US production and production costs," Societe Generale analysts said in a note.