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Oil prices edge back from 2016 highs

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Oil prices pulled back a tick Friday from 2016 peaks, capping a fourth straight week of gains as the market pushed higher supported in part by a weaker US dollar.

[NEW YORK] Oil prices pulled back a tick Friday from 2016 peaks, capping a fourth straight week of gains as the market pushed higher supported in part by a weaker US dollar.

Traders seemed bent on looking past the global supply glut and media reports of higher Opec production in favor of optimism that eventually the market will find a balance that would stabilize prices, which have slid from mid-2014 peaks above US$100 a barrel.

US benchmark West Texas Intermediate (WTI) slipped 11 US cents to US$45.92 a barrel on the New York Mercantile Exchange.

In London, Brent North Sea crude for delivery in June, the European benchmark, lost only one cent at US$48.13 a barrel.

Over the course of the week, WTI rose 5.0 per cent and Brent 6.7 per cent, pushing the month's gains to around 20 per cent for both.

"The supply situation is still a factor in terms of oversupply and I think we rallied as much as we can on the hopes of a rebalancing coming at the end of the year," said John Kilduff of Again Capital.

Also underpinning the market was the US dollar's weakness after the Federal Reserve indicated Wednesday it was in no hurry to raise interest rates and the Bank of Japan's rejection of more stimulus the next day, which sent the yen soaring, analysts said.

A weak US dollar makes oil, priced in the US currency, more affordable for buyers.

"The declining US oil production and a weaker US dollar are giving tailwind to prices, whereas the ongoing oversupply and record-high US crude oil stocks are being ignored," said Commerzbank analysts in a client note Friday.

AFP