Oil jumps on weaker dollar; U.S. crude up 4 percent
By Barani Krishnan
NEW YORK (Reuters) - Oil prices jumped on Friday with U.S. crude up 4 percent after the dollar fell on interest-rate uncertainty, lifting demand for dollar-denominated commodities from holders of other currencies.
Benchmark Brent oil snapped two straight weeks of losses while U.S. crude had its first positive week in five. Iran's struggle to reach a nuclear deal with world powers also supported oil prices, since it looked as if sanctions on its oil exports would continue.
Contract expiry in U.S. crude added momentum. Traders and investors tried to narrow the price difference between the expiring April contract in U.S. crude and nearby May, which will become front-month from Monday.
"In our view, today’s strength is paper market tightness, unrelated to the physical market," Tim Evans, energy futures specialist in New York for Citi Futures said, referring to the general view that there was too much oil in the world.
Brent's front-month May contract closed up 89 cents, or 4 percent, at $55.32 a barrel. It rose 1.2 percent on the week.
U.S. crude for April settled up $1.76, or 1.6 percent, at $45.72. It gained 2 percent on the week.
Brent's premium over U.S. crude narrowed to below $9 a barrel from a high of nearly $11 the previous week. Technical analysts said the spread, one of the biggest volume trades in the oil market, could eventually blow out to above $30.
The dollar was lower as a Federal Reserve statement on Wednesday fed the view that the U.S. central bank is in no hurry to raise interest rates. [USD/] Continued...