Oil prices increased today, driven by a drop in the dollar and on hopes that the US Federal Reserve’s economic stimulus will be ongoing.

Brent crude rose by 43 cents to $104.03 a barrel, while US oil gained by 31 cents to $95.07, reported Reuters.

A sharp fall in the US dollar to three-month lows in the previous session and its weak performance in Asian trade provided some support to oil prices.

The US Federal Reserve’s policy-setting committee is scheduled to meet on 18-19 June to discuss the ongoing economic stimulus.

Investors expect the US central bank will not announce that it will reduce the $85bn in bonds it is buying each month, considering weak data from manufacturing and consumer spending, indicating that the economy is still not healthy in the second quarter.

Traders will also keep their focus on the US employment data to get more information on the health of the world’s biggest economy.

On Thursday, initial job figures pointed to a moderate growth; however, it is not strong enough to persuade the Federal Reserve to reduce the amount of money it is pumping into the banking system.

The news that the Buzzard oil field in the UK North Sea has suffered a production outage, the second in less than a week, also boosted oil prices. The field’s daily production capacity is about 200,000 barrels per day.

Energy industry intelligence service, Genscape‘s, report that crude inventories at the Cushing, Oklahoma, oil hub have dropped more than one million barrels between 31 May and 4 June have also pushed the prices further.

Image: Oil received support due to a sharp fall in the US dollar to three-month lows. Photo courtesy of freedigitalphotos.