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Brent holds above US$57 on bargain hunting, weaker dollar
[SINGAPORE] Brent crude steadied above US$57 a barrel on Friday on bargain hunting by investors, but gains were capped by a steadying dollar after its fall from multi-year highs on weaker US retail sales.
Asian investors were also mulling the impact from a tentative deal that would end a strike by US refinery workers.
Brent for April delivery was trading up 5 cents at US$57.13 by 0318 GMT after ending the previous session down 46 cents. The April contract expires on Monday.
US crude futures rose 3 cents to US$47.08 after settling down US$1.12, or 2.3 per cent, in the previous session. The April contract expires on March 20. "Oil prices have dropped quite hard. Movements now are market driven - it's bargain hunting people are going in for,"said Daniel Ang, an analyst at Singapore's Phillip Futures.
Prices could also move higher once investors digest the impact from a pact to end a 40-day walkout by workers at 12 refineries, which has affected a fifth of US refining capacity, Mr Ang said.
Brent's premium to US crude had climbed to more than US$10 mainly due to the strike, the longest walkout by refinery workers in 35 years, he said.
The deal would boost refining volumes that could reduce US crude oil stockpiles which climbed last week to 448.9 million barrels, the highest level in 80 years, Mr Ang said.
But the reopening of the Houston ship canal, which was closed by fog and a collision between ships, could boost oil imports, potentially dampening prices. "When the strike's over the premium will drop down to about US$4," Mr Ang said.
Oil prices on Friday were supported by a softer US dollar , which posted its biggest one day fall in a month on Friday, retreating from a 12-year high against a basket of major currencies on an unexpected fall in US retail sales in February.
A strong greenback makes commodities denominated in the dollar more expensive for holders of other currencies.
Investors are also eyeing developments in Libya and Iraq.
Islamist militants claimed responsibility for a bomb attack in the Libyan capital Tripoli even as production from the Opec member's western oilfields, saw a surprise comeback.
Oil companies in Iraq have have proposed cutting development spending by millions of dollars after the country's oil ministry told them low oil prices and its fight against Islamic State had made payments difficult.