WASHINGTON (dpa-AFX) - Crude oil gained modestly on Friday, aided by weakness in the U.S. dollar along with the vigorous U.S. push to encourage conventional energy instead of renewable energy despite reports of crude oil oversupply and low demand.
WTI Crude Oil for December delivery was last seen trading up by $0.38 (or 0.64%) at $59.81 per barrel.
In the U.S., the government shutdown has entered day number 38.
With job cuts mounting in the private sector and federal workers furloughed, concerns about weakening in the U.S. economy have risen.
The U.S. dollar index was last seen trading today at 99.53, down by 0.16 (or 0.16%).
A weaker dollar supports commodities priced in the U.S. dollar, as it makes them cheaper for international buyer.
The U.S. Federal Reserve is set to announce its next monetary policy decision following its December 9-10 meeting. With the latest private jobs data showing a surge in layoffs, investors are expecting another rate cut by the Fed. The rate cut could impact the U.S. dollar.
In a significant development at an energy conference in Athens, Greece, U.S. officials stated that world should focus on reliable fossil fuel supply rather than renewable energy, which they claimed is not rewarding for investments. The U.S. administration wants to replace Russia as a supplier of oil and energy into Western Europe. The U.S. produces over 20 million barrels per day of oil and liquids (every fifth barrel in the world).
On Sunday, OPEC+ announced a further supply increase of 137,000 barrels per day for December but said it plans to halt any further hikes for the first quarter of 2026.
According to a survey release on Tuesday by Reuters, the Organization of Petroleum Exporting Countries pumped 28.43 million barrels per day in October, up from 30,000 bpd of September's total, with Saudi Arabia and Iraq making the largest increases.
Traders are also concerned about reports of record crude oil volumes going into floating storage. This is driven in part by anti-Russian sanctions targeting tankers as well as by extra Middle East cargoes.
On Wednesday, the US Energy Information Administration (EIA) reported that U.S. commercial crude oil inventories increased by 1.3% for the week ending October 31. It further stated that inventories rose by around 5.2 million barrels to 421.2 million barrels, against the market prediction of a 2.4 million-barrels decrease.
The U.S. has hit Russia's two biggest oil producers, Rosneft and Lukoil, with sanctions. Both corporates contribute to around 50% of total Russian oil production. As a result, the organizations have cut back on their oil purchases indicating a disruption in Russian oil supply.
Demand concerns have forced the world's largest oil exporter Saudi Arabia to slash its December crude oil prices for Asian buyers.
However, weakness in greenback and the aggressive measures by the U.S. to push fossil fuels supported crude oil prices today.
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