Oil prices rise on Nigeria pipeline attack, weaker dollar

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SINGAPORE, NOVEMBER 3, 2016 – Crude oil futures rose on Thursday as an attack on a Nigerian oil pipeline and a weaker U.S. dollar buoyed sentiment in the market, lifting prices from five-week lows.

Brent crude was trading up 50 cents, or 1.1 percent, at $47.36 a barrel by 0640 GMT. U.S. crude was up 40 cents, or 0.9 percent, at $45.74 per barrel.

Crude prices were underpinned by concerns about supply disruptions after militants in Nigeria’s southern Niger Delta oil hub attacked a pipeline operated by the Nigerian National Petroleum Corporation on Wednesday.

“The market is always a little sensitive to (news about supply disruptions),” said Ric Spooner, chief market analyst at CMC Markets.

A softer dollar also buoyed prices by making the dollar-denominated oil less costly for importing countries.

The dollar slipped for a third session as positioning for next week’s U.S. presidential election overshadowed the Federal Reserve’s latest review, where policymakers signalled they were on track to hike rates next month.

On Wednesday, both oil benchmarks hit their lowest since late September after data showed U.S. crude stockpiles soared more than 14 million barrels last week, the largest weekly build since the U.S. Energy Information Administration started keeping records in 1982.

“The recovery (in oil prices) has more to do with the fact that it hit a strong support at around $46.50 a barrel,” a Singapore-based oil broker said, referring to Brent that hit a low of $46.46 in the prior session. U.S. crude fell to $44.96 on Wednesday.

 

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