Oil prices jump amid supply worries; US dollar falls

(File Photo: IANS)

New York- Oil prices rebounded as investors worried about plummeting Nigerian production after a militant attack in Nigeria.

The West Texas Intermediate for July delivery on Monday added $1.07 to settle at $49.69 a barrel on the New York Mercantile Exchange, while Brent crude for August delivery gained $0.91 to close at $50.55 a barrel on the London ICE Futures Exchange, Xinhua news agency reported.

Output of Nigeria’s Bonny Light crude has fallen by an estimated 170,000 barrels per day (bpd) following recent attacks on pipeline infrastructure, according to media reports on Monday.

Traders were also encouraged by the speculation that the Federal Reserve will not raise interest rates this month, which will weaken the US dollar and bolster the dollar-priced crude.

Fed Chair Janet Yellen said at the World Affairs Council of Philadelphia on Monday that the overall labour market is quite positive, although the recent slowdown in jobs bears “close watching”.

She said additional rate increases would still probably be appropriate but did not give a specific time period for the next hike.

US Dollar falls:-

The US dollar declined against most major peers after Federal Reserve Chair Janet Yellen failed to signal the timing of further interest rate-hikes.

In late New York trading on Monday, the euro rose to $1.1371 from $1.1340 in the previous session, and the British pound decreased to $1.4457 from $1.4515 in the previous session, Xinhua news agency reported.

The Australian dollar inched up to $0.7377 from $0.7354.

The US dollar bought 107.37 Japanese yen, higher than 106.74 yen of the previous session.

The US dollar fell to 0.9700 Swiss franc from 0.9769 Swiss franc, and it declined to 1.2815 Canadian dollars from 1.2939 Canadian dollars. Enditem

In her last public speech before the Fed’s June policy meeting next week, Yellen said US interest rate-hikes are likely on the way, but did not mention the timing of the hike.

“If incoming data are consistent with labor market conditions strengthening and inflation making progress toward our 2-percent objective, as I expect, further gradual increases in the federal funds rate are likely to be appropriate,” Yellen said at the World Affairs Council of Philadelphia on Monday.

The dollar index, which measures the greenback against six major peers, was down 0.12 percent at 93.914 in late trading.