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Oil becomes stronger against weakening USD

12 April 2016 15:50 (UTC+04:00)
Oil becomes stronger against weakening USD

By Fatma Babayeva

World oil prices experience rise as the U.S. dollar keeps falling during this week.

The price of Brent crude is approaching to its peak since December 2015, RIA Novosti reported based on the current transactions done in the market.

The cost of the Brent June futures rose by 1.86 percent up to $42.72 dollars per barrel on April 11.

Earlier, it rose to $42.98 per barrel by approaching to the maximum since December 7 last year when crude was sold at $43 per barrel.

Meanwhile, the price for WTI May futures increased by 1.46 percent to $40.30 per barrel.

The dollar index (value of U.S. dollar relative to a basket of currencies of the six countries which are main U.S. trade partners) fell by 0.24 percent to 93.94 points.

Reduction in U.S. currency makes dollar-traded oil cheaper for holders of dollars.

The Wall Street Journal reported this week that increase in oil price contributes to the expectations that oil production and stock levels in U.S. will experience a decline.

The U.S. Department of Energy will release its statistics on April 13.

The price of OPEC oil basket also increased by 2.8 percent to $37.02 dollars per barrel on 11 April which is $1.01 more compared to April 8, the cartel told Trend news agency.

The price for OPEC oil basket is determined on the basis of following crude prices - the Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Minas (Indonesia), Iran Heavy (Iran), Basra Light (Iraq), Kuwait Export ( Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).

Investors are also waiting for the upcoming meeting of oil producers in Doha, the Qatari capital on April 17.

The meeting between OPEC member countries and non-OPEC major oil producing will discuss the possible arrangements for freezing oil output and ways to increase oil prices in the market.

In addition, the reduction in shale oil production in U.S. may be another factor contributing to the decrease of oil output in the market.

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Fatma Babayeva is AzerNews’ staff journalist, follow her on Twitter: @Fatma_Babayeva

Follow us on Twitter @AzerNewsAz

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