Crude Oil Ends Higher As Concerns Over Iranian Supply Ease

(RTTNews) - U.S. crude oil moved up for a second straight session to end higher on Friday, as concerns over Iranian oil flooding the already oversupplied market in the near term eased.

Nevertheless, the gains were capped after the dollar trended higher against a basket of major currencies. A strong dollar normally discourages buying dollar-denominated commodities as they become more expensive to holders of foreign currencies.

The uptick comes amid a surge in inventories last week reported by the U.S. Energy Information Administration. Traders mulled over oil storage issues with the key storage and delivery hub for NYMEX crude at Cushing filled 85 percent of its total capacity of 70.1 million barrels.

Tehran's deal with the West over its nuclear program suggest further oil flow into markets, but analysts say it could take Iran several months to ramp up its oil production for export and swamp global markets.

With no near-term worries of Iranian crude flooding the markets, oil prices trended higher but the gains were capped by a strong dollar.

Light Sweet Crude Oil futures for May delivery, the most actively traded contract, gained $0.85 or 1.7 percent to settle at $51.64 a barrel on the New York Mercantile Exchange Friday.

Crude prices for May delivery scaled a high of $52.07 a barrel intraday and a low of $50.63.

On Thursday, crude oil gained $0.37 or 0.7 percent to settle at $50.79 a barrel, on easing concerns of a supply glut in oil markets after the Iran accord, even as crude stockpiles jumped much more than expected last week.

A weekly report from the U.S. Energy Information Administration on Wednesday showed U.S. crude oil inventories to have surged 10.9 million barrels in the week ended April 3, while analysts expected an increase of 3.2 million barrels. The report showed U.S. crude oil inventories at 482.4 million barrels end last week. Stockpiles are at its highest in about 80 years and have been climbing for the 13th straight week since the week ended January 9.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 99.43 on Friday, up from its previous close of 98.97 on Thursday in late North American trade. The dollar scaled a high of 99.69 intraday and a low of 98.84.

The euro trended lower against the dollar at $1.0591 on Friday, as compared to its previous close of $1.0659 in North American trade late Thursday. The euro scaled a high of $1.0686 intraday and a low of $1.0569.

On the economic front, a Labor Department report on Friday showed U.S. import prices to have moved back to the downside in March, after reporting a modest rebound in prices the previous month. Import prices dipped by 0.3 percent in March after edging up by a revised 0.2 percent in February. The pullback in prices matched economist estimates.

Meanwhile, the report also said U.S. export prices inched up by 0.1 percent in March following a revised 0.2 percent drop in February. Economists expected export prices to slip by 0.2 percent.

Chinese inflation remained unchanged in March and producer prices continued to remain in negative territory, giving room for the central bank to adjust its policy to spur economic growth. The consumer price index gained 1.4 percent in March from last year, the same rate of growth as seen in the prior month, the National Bureau of Statistics reported Friday. Inflation was forecast to ease marginally to 1.3 percent.

French industrial production and manufacturing output remained unchanged in February, statistical office Insee reported Friday. Industrial production showed nil growth in February after rising 0.3 percent in January and 1.5 percent in December. Economists had forecast output to fall 0.1 percent.

U.K. industrial production logged a marginal growth in February as the expansion in manufacturing was largely offset by a decline in oil and gas output, data from the Office for National Statistics revealed Friday. Industrial output rose 0.1 percent on a monthly basis in February, offsetting January's 0.1 percent fall. This was the first rise in three months but the rate was weaker than a 0.3 percent growth forecast by economists.