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Oil prices rise before US data

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Oil prices climbed Wednesday awaiting US inventory data - and as traders reacted to a weaker dollar, unrest in Africa's biggest crude producer Nigeria and uncertainty over Britain's EU referendum result.

[LONDON] Oil prices climbed Wednesday awaiting US inventory data - and as traders reacted to a weaker dollar, unrest in Africa's biggest crude producer Nigeria and uncertainty over Britain's EU referendum result.

Around 1100 GMT, Brent North Sea crude for delivery in August rose 17 cents to US$50.79 a barrel.

US benchmark West Texas Intermediate for August delivery gained 44 cents to US$50.29 compared with Tuesday's close.

Oil advanced "on hopes another drawdown in US inventories will be evident in data" published Wednesday, analysts at trading group Accendo Markets said in a client note.

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US commercial crude inventories are expected to have declined by 1.5 million barrels last week, according to a survey of experts by Bloomberg News. However stockpiles remain at record-high levels amid a global market awash in supply.

Stephen Innes, senior trader at OANDA Asia Pacific, said oil prices "are being dictated by the US dollar movement".

The greenback was down against its main rivals in trading Wednesday, making dollar-denominated oil cheaper for holders of other currencies.

The dollar faced renewed pressure after Federal Reserve boss Janet Yellen again warned of the economic dangers of Britain voting to leave the European Union in Thursday's referendum.

Oil prices were winning support also "after rebels in Nigeria denied that any ceasefire agreement had been reached with the government", said Commerzbank analyst Carsten Fritsch.

"This means there is still a risk of prolonged supply outages in this West African country."

AFP

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