Crude oil hits 2-day high on slumping U.S. dollar, Nigeria violence

http://www.futurespros.com/news/energy-news/crude-oil-hits-2-day-high-on-slumping-u.s.-dollar,-nigeria-violence-1000010343

Futures Pros – Crude oil futures were up for a second day on Wednesday, hitting a 2-day high as prices were boosted as the U.S. dollar remained under pressure and violence erupted in Nigeria, Africa’s largest oil producer.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at USD109.42 a barrel during European morning trade, jumping 1.17%.

It earlier rose to USD109.49 a barrel, the highest price since April 18.

The dollar remained under broad selling pressure after ratings agency Standard & Poor's cut the outlook on its AAA rating for the U.S. to ‘negative’ from ‘stable’ on Monday.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.49% to hit 74.92.

Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.

Traders also focused on reports that Nigeria’s Muslim north has rebelled against the apparent electoral victory of incumbent president Goodluck Jonathan, a Christian from the south.

Head of Nigeria’s Civil Rights Congress, Shehu Sani said clashes between Christians and Muslims broke out for a second day in the northern city of Kaduna, killing at least six people.

Nigeria produces approximately 1.9 million barrels of oil per day, making it Africa’s largest oil producer, according to the U.S. Energy Information Administration.

Meanwhile, the U.S. Energy Department was to release its closely-watched crude oil inventories report for the week ended April 15 later in the day. The data was expected to show that U.S. crude oil stockpiles increased by 0.7 million barrels, after rising by 1.6 million barrels in the preceding week.

Industry data released by the American Petroleum Institute on Tuesday showed that U.S. crude inventories rose by 0.65 million barrels last week.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for June delivery climbed 1.1% to trade at USD122.47 a barrel, up USD13.05 on its U.S. counterpart.