4/28/2016, 9:01 PM (Source: TeleTrader)
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Oil prices hit 2016 high boosted by weaker dollar

Crude oil prices hit their highs in 2016, finally reaching levels last seen in December. The weaker U.S. dollar helped the rise, despite global oversupply and overproduction, and high inventories in the United States.

Looking at year-to-date scale, prices of WTI gained 21.47%, while Brent blend grew by 25.16%, according to available market data.

U.S. light sweet crude traded up 1.56% at $46.03 a barrel at ICE Europe by 8:30 p.m. CET (2:30 p.m. EDT), the time trading ended in the U.S.

WTI for June delivery last traded up 1.43% at $45.99 a barrel (up 6.06% for the week), and the North Sea benchmark was up 1.89% at $48.09 a barrel (up 7.25% for the week) at 9:00 p.m. CET.

Other energy prices were also on the rise; gasoil moved up 1.69%, and heating oil added 1.76%. Exception: natural gas, which fell 9.01% for the day, but still held up for the week.

The price movements were closely tied with the slide of the U.S. dollar against basket of major currencies from Monday. Many commodities are denominated in the U.S. dollar and so the lower value of the greenback makes them more attractive for buyers who otherwise hold e.g. euros.

While previous week's failure of the leading oil producing countries to reach a freeze in production – during a rare OPEC and non-OPEC meeting in Doha, Qatar – markets seem to have turned their attention more towards supply-and-demand side of the equation.

Iran has refused to settle for any freeze, let alone reduction in output, until the country reaches pre-sanctions level of production of 4 million barrels per day. As the largest oil producer in the world, Saudi Arabia wants to keep its market share. On the other hand, Venezuela has been advocating a freeze to fight off lower prices, which ruin the economy of the country highly dependent on oil export.

Baha Breaking News (BBN) / ZR