Oil rises 1 percent on weaker dollar, but U.S. drilling drags

coiOil prices rose 1 percent early on Monday on a weaker dollar, but an increase in U.S. drilling activity stoked worries that a global supply glut will persist despite an OPEC-led effort to curb output.

Global benchmark Brent crude futures were trading up 45 cents, or 1.0 percent, at $45.99 per barrel at 0623 GMT.U.S. West Texas Intermediate (WTI) crude futures were up 43 cents, or 1.0 percent, at $43.44 per barrel.

 

Analysts said oil prices extended gains as investors covered short positions, but there was little fundamental news supporting prices.”It is just the fact that the oil market stopped falling. I suspect short covering,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.The U.S. dollar index stayed low on Monday against a basket of currencies amid fading expectations for the Federal Reserve to hike interest rates again later this year. A weaker dollar also makes oil cheaper for countries using other currencies.

 

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