Oil advanced as the dollar weakened before U.S. government data forecast to show crude stockpiles expanded for a seventh week.
Futures climbed as much as 1.1 percent in New York, rising for the first time in five sessions. The Bloomberg Dollar Spot Index held the biggest loss in more than a week after Federal Reserve Chair Janet Yellen reasserted the central bank’s gradual approach to raising interest rates. U.S. crude inventories probably increased by 3.1 million barrels last week, according to a Bloomberg survey, keeping supplies at the most in eight decades.
“Yellen’s dovish comments and the weakness in the U.S. dollar have led to a gain in the oil price,” Angus Nicholson, an analyst at IG Ltd. in Melbourne, said by phone. “There isn’t a strong reason to see oil above $40 at the moment because we haven’t seen the required supply-demand rebalancing to sustain prices at that level.”
Oil tumbled to a 12-year low this year before rebounding on speculation the global surplus will ease as U.S. output declines. Iran will attend talks with fellow members of the Organization of Petroleum Exporting Countries and Russia in Qatar next month without joining their proposal to freeze production, according to a person familiar with the nation’s policy.
West Texas Intermediate for May delivery climbed as much as 41 cents to $38.69 a barrel on the New York Mercantile Exchange and was at $38.65 as of 8:23 a.m. Hong Kong time. The contract fell 2.8 percent to $38.28 Tuesday, the lowest close since March 15. Total volume traded was about 65 percent below the 100-day average. Prices are up 15 percent this month.
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Brent for May settlement gained as much as 34 cents, or 0.9 percent, to $39.48 a barrel on the London-based ICE Futures Europe exchange. The contract dropped $1.13 to $39.14 on Tuesday. The global benchmark crude was at an 80-cent premium to WTI.
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