Oil up on dollar drop; poll calls for U.S. stocks decline
By Barani Krishnan
NEW YORK (Reuters) - Oil prices rose on Tuesday, driven by a weak dollar and expectations that U.S. crude supplies could have fallen last week for a fifth straight week.
But the American Petroleum Institute (API) estimated an inventory build instead, in a report released after the market's settlement, causing oil to pare some of its earlier gains.
API said U.S. crude inventories rose by 1.8 million barrels in the week to May 29. Analysts polled by Reuters had forecast stocks would drop by 1.7 million barrels, for a fifth straight week of declines.
The government-run Energy Information Administration will issue official inventory data on Wednesday.
Brent crude oil settled up 61 cents, or 1 percent, at $65.49 a barrel. It was up 44 cents by 4:56 p.m. EDT, after the API data.
U.S. crude settled up $1.06, or 1.8 percent, at$61.26. It traded 81 cents higher after the data.
The likelihood of high global supplies from OPEC's lack of will to cut output when it meets this week was also a factor in Tuesday's market, although it did not have a significant impact on prices, traders said.
The weaker dollar was a bigger factor as it made crude prices, denominated in the greenback, more affordable to holders of the euro and other currencies. The euro was up its most against the dollar since mid-March on bets that Greece would reach a deal with its creditors. Continued...