Brent crude oil rose above $67 a barrel towards five-month highs on Wednesday after U.S. crude stockpiles fell for a second straight week, suggesting that the world’s biggest oil market is rebalancing.
U.S. crude, gasoline and distillate stockpiles all fell last week, the American Petroleum Institute said on Tuesday, ending months of builds that have lifted stocks to record highs.[API/S]
Prices also gained some lift after the dollar index .DXY plunged to a three-month low, following weak retail sales data for April.
Dollar-traded commodities such as oil benefit from a weaker U.S. unit as it makes them cheaper for holders of other currencies.
“Any recent dollar weakness is very supportive for the market,” said Myrto Sokou, senior analyst at Sucden Financial.
Brent for June LCOc1 was up 59 cents at $67.45 a barrel by 1328 GMT. Brent hit a high of $69.63 on May 6, its strongest since December. U.S. crude CLc1 was up 77 cents at $61.52 after reaching an earlier high of $61.83.
U.S. crude rose 2.5 percent and Brent 3 percent on Tuesday, underpinned by a weaker dollar and tensions in the Middle East.
Oil shrugged off a bearish report from the International Energy Agency (IEA), which said global supplies increased, outpacing small rises in oil demand. [IEA/M]
Many analysts, including the IEA, say that global oil market supply is rising as members of the Organization of the Petroleum Exporting Countries (OPEC) pump record levels in a battle for market share.