RTRS: Oil above $77 on weak dollar, lower inventory build
By Jennifer Tan
SINGAPORE (Reuters) - Oil was steady above $77 a barrel on Thursday in holiday-thinned trade, after rising 2 percent the previous day, buoyed by the dollar's sharp fall and a lower-than-expected build in U.S. crude inventories.
The U.S. dollar slumped to a more than 15-month low against a basket of six currencies on Wednesday, as data suggesting the U.S. jobs and housing markets were stabilizing helped boost Wall Street and overall risk appetite, denting safe-haven demand for the dollar and lifting higher yielding currencies.
U.S. crude for January delivery fell 43 cents to $77.53 a barrel by 0308 GMT, after settling up $1.94 at $77.96 on Wednesday. London Brent crude was down 32 cents at $78.12.
"The weaker dollar and less bearish statistics from the EIA helped to push oil higher, otherwise, it would be drifting lower," said Tony Nunan, risk manager at Tokyo-based Mitsubishi Corp.
"We expect a tight range of $75 to $80 for the next week. So far, we've seen speculative buying based on the weaker dollar, and selling based on inventory data. It looks like this pattern will continue."
The U.S. Energy Information Administration's (EIA) inventory report released on Wednesday showed crude stockpiles rose 1.0 million barrels in the week to November 20, marginally less than analysts' forecasts of a 1.2 million-barrel build.
The figure was also lower than a Tuesday report by the American Petroleum Institute (API) that showed crude stocks rose 3.3 million barrels.
The New York Mercantile Exchange floor trading is closed on Thursday for the U.S. Thanksgiving Day holiday and will have an abbreviated session on Friday, but some electronic trading will take place.
Data released on Wednesday indicated the U.S. economy could be on the mend.
Consumer spending in the world's largest economy rose more than expected, while new jobless benefits claims dropped. New home sales in October also rose to their highest level in a year.
Oil markets have increasingly looked to economic data this year for signs of a global recovery to boost flagging demand.
Oil prices have more than doubled from below $33 in December, but remain 47 percent below the record of more than $147 hit in July 2008. Prices have risen amid rallying equity markets and a weaker greenback makes crude more attractive for foreign currency holders.
