Oil up on Dollar, U.S. Equities; Crude Inventories Eyed

Oil Reuters

Oil prices rose on Monday as a softer dollar and stronger U.S. equity markets helped crude futures rebound from an earlier drop pressured by worries about increased drilling activity for oil in the United States.

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Data from energy monitoring service Genscape showing a draw of 330,611 barrels at the Cushing, Oklahoma delivery point for U.S. crude futures in the six days to Sept. 12 also supported oil prices, said traders who saw the data.

Brent crude was up 30 cents at $48.31 per barrel by 11:17 a.m. EDT (1517 GMT).

U.S. West Texas Intermediate crude rose 29 cents to $46.17.

Oil prices were down earlier in the session, extending Friday's trend, on data from last week showing U.S. drillers having added oil rigs for a tenth week in 11 that showed the longest stretch of builds in the oil rig count since 2011.

The market was boosted later by uncertainty over a potential U.S. Federal Reserve rate hike this month that sent the dollar lower and equity markets higher. A softer dollar makes greenback-denominated commodities, including crude, more affordable to holders of the euro and other currencies.

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"We still see some difficult choppy trading conditions ahead with the energy complex buffeted by occasional surprises on the fundamental front, only to be offset by macroeconomic headlines that can quickly negate the prior day's price swing," said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.

Notwithstanding Monday's rebound, oil prices are down about 5 percent since Sept. 8, partly reversing a 10 percent rally early in the month that took to prices to around $50 a barrel.

Much of that decline was pressured by the dollar's rally on speculation that the Fed may resort to a rate hike in September.

Fundamentally, oil prices got a boost last Thursday after government data showed an extraordinary drop of 14.5 million barrels of U.S. crude stockpiles during the week ended Sept. 2, the largest weekly drawdown since 1999.

(By Barani Krishnan; Addtional reporting by Amanda Cooper in LONDON, Henning Gloystein in SINGAPORE and Osamu Tsukimori in TOKYO; Editing by Marguerita Choy and David Goodman)

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