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April 26, 2016

Oil prices gain due to weak dollar

There has been a rise in oil prices primarily due to a weak dollar and fall in US supply.

There has been a rise in oil prices primarily due to a weak dollar and fall in US supply.

Brent crude futures were up $1.03 at $46.77 a barrel, while the US West Texas Intermediate crude futures rose 86 cents to $44.90, Reuters reported.

Hopes for a deal proposed by major oil producers to curb output faded almost two weeks ago when a meeting between OPEC members and non-OPEC members collapsed.

"There was definitely a bit of a turning point when we had the initial sell-off after the producer meeting."

CMC Markets strategist Jasper Lawler told the news agency: "There was definitely a bit of a turning point when we had the initial sell-off after the producer meeting."

Brent gained support on news that Saudi Arabia and Kuwait are struggling to restart the Khafji oilfield, which is jointly operated by them, due to supply glut.

Prior to its closure in October 2014 over environmental issues, the oil field produced 280,000bpd to 300,000bpd.

WTI further strengthened after the American Petroleum Institute reported a 1.1 million barrels fall in US crude inventories last week, which is against analysts’ expectations of a 2.4 million barrel increase.

The dollar fell 5% against a basket of currencies since the start of 2016 making it cheaper for non-US investors to buy dollar-denominated assets.

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