Oil prices boosted by dollar slump

Oil prices pushed higher Monday thanks to a softer dollar after last week’s disappointing US jobs report, but gains were limited as producers increased their rig count.

The US Labor Department said Friday that just 38,000 new jobs were created last month, a quarter of what was expected.

With a US interest rate rise not now seen before September at the earliest, the dollar tumbled — making oil cheaper for anyone buying it with other currencies.

At about 0640 GMT, US benchmark West Texas Intermediate was up 42 cents, or 0.86 percent, at $49.04, while Brent gained 36 cents, or 0.73 percent, to $50.00.

Oil is up about 85 percent from the near 13-year lows touched at the start of the year, and key producer Abu Dhabi said the supply glut that had hammered prices was easing quicker than expected.

Ali Majed Al Mansoori, chairman of Abu Dhabi Department of Economic Development, also predicted prices could rise to as much as $60 this year.

However, analysts said gains would meet resistance as current prices are making it viable for producers to bring rigs back online.

On Friday the Baker Hughes weekly North American rig count showed an increase of nine onshore oil drilling platforms in the US.

IG Markets analyst Bernard Aw told AFP: “The move in oil prices is not in proportion to the dollar retreat.

“One would have expected oil prices to push much higher than what we’re seeing… traders might be waiting for news more related to oil itself.”

Crude has managed to hold up as the refusal last week by export cartel OPEC to agree output limits was offset by another fall in US stockpiles, which fuelled hopes of a recovery in demand in the world’s top oil consumer.

Disruptions to supplies from Nigeria and Canada also provided support.