Oil Inches Up As Dollar Dims

Oil.......

Crude oil futures

inched up in Asia as the US dollar dimmed after three straight session of gains boosting the dollar denominated commodities.

Light, sweet crude for June delivery is trading up 18 cents at $ 95.35 per barrel on the New York Mercantile Exchange. Yesterday it settled 87 cents, or 0.9%, lower at $95.17 a barrel.

The U.S. dollar pulled lower Tuesday, edging back from gains against Japan’s yen, and softening against the euro ahead of the release of economic reports from Europe.

The ICE dollar index, which measures the U.S. dollar’s moves against six other major currencies, fell to 83.015 from late Monday’s level at 83.276. The U.S. dollar bought 101.51 yen, down from ¥101.81 late Monday in North America.

Yesterday, the counter settled lower for the third straight session, weighed by concerns over weakening demand in China and robust global production. Futures headed lower after data released Monday showed Chinese industrial output in April came in at 9.3% above last year's level.

On Monday, the Organization of the Petroleum Exporting Countries raised its strongest concerns yet this year about weakening oil demand in China. It cut its estimate for Chinese oil demand growth in the first quarter by 20,000 barrels a day, saying weaker-than-expected economic growth in China "may dent oil demand consumption."

Research service Platts estimated OPEC raised crude output by 25,000 barrels a day to 30.5 million barrels a day in April. The increase marked the end of a recent trend of lower production. The service said output had fallen by nearly a million barrels a day between October and March.

Platts said the increase was driven by higher output from Saudi Arabia, the biggest producer, and Iraq, the No. 2 producer. The group's next meeting in Vienna scheduled for May 31

Meanwhile, many oil-market observers remained concerned about the effect of a wind-down of monetary stimulus measures at the U.S. Federal Reserve. An end to the measure would likely entail more support for the U.S. dollar, which typically weakens oil prices by making the commodity more expensive to global buyers.

MCX May crude futures may open today’s session near Rs 5235 levels with resistance near Rs 5270-85 levels today. It should find a good support near Rs 5200 levels.

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