Bullish oil markets hit new 2016 highs

NEW YORK (AFP) – World oil prices climbed again on Thursday, hitting the highest levels this year despite an absence of significant news to spur the gains.

Rising for a third day, prices had some support from a weaker dollar after the Federal Reserve held interest rates unchanged on Wednesday and signaled it was in no hurry to raise rates, analysts said.

“We had the Fed go relatively dovish, so we had a bit of a move lower in the US dollar – that s commodity-positive,” said Bart Melek of TD Securities.

The oil markets are looking past the global oversupply for the moment “and bidding things up technically,” Melek said. “Brent probably wants to go to 50 bucks.”

In London, Brent North Sea for June delivery, the European benchmark, rose 96 cents to the highest price since November at US$48.14 a barrel.

US benchmark West Texas Intermediate for delivery in June advanced 70 cents to US$46.03 a barrel on the New York Mercantile Exchange.

“If I could figure out why the crude oil prices are so high!” said James Williams of WTRG Economics. “Prices have been strong and typically you get some profit-taking at this point.”

The weaker dollar could be helping. On Thursday, the dollar tumbled about 3.0 per cent against the Japanese currency after the Bank of Japan disappointed markets by not offering additional stimulus to the struggling economy.

“The Japanese yen is doing its best to support oil prices today, as the yen has rallied like a mad thing on inaction by the Bank of Japan,” said Matt Smith of ClipperData.