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Oil prices edge up on weaker dollar, expected crude output cuts

Published 16/01/2017, 11:44 am
© Reuters.  Oil prices edge up on weaker dollar, expected crude output cuts
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By Henning Gloystein

SINGAPORE, Jan 16 (Reuters) - Oil prices inched up on Monday, supported by a weaker dollar and expectations that OPEC and other producers will cut output as part of a deal to curb global oversupply.

Brent crude futures LCOc1 , the international benchmark for oil prices, were trading at $55.55 per barrel at 0035 GMT, up 10 cents from their last close.

U.S. West Texas Intermediate (WTI) crude futures were up 9 cents at $52.46 a barrel.

Traders said that prices were buoyed by a weakening dollar, which makes fuel purchases cheaper for countries that use other currencies domestically, potentially spurring demand.

After spending much of the second half of 2016 in an uptrend, the dollar has lost around 2.5 percent in its value against a basket of other leading currencies .DXY since its early-January peak.

The greenback is in particular focus for international investors this week as Donald Trump is set to take over the U.S. presidency on Friday.

"Oil pricing will be driven this week by the movement of the U.S.-dollar rather than crude itself, with President-elect Trump's inauguration ... being the main event," said Jeffrey Halley, senior market analyst at OANDA brokerage in Singapore.

Oil also continued to receive support from an announced crude output cut from major producers including the Organization of the Petroleum Exporting Countries (OPEC) and Russia.

OPEC has said it would cut its output by 1.2 million barrels per day to 32.50 million bpd from Jan. 1, and Russia as well as other non-OPEC members are planning to cut about half as much. there is a broad expectation that OPEC will not fully implement its announced cuts, although compliance estimates of 50 to 80 percent are enough to keep crude prices supported in the mid-$50s per barrel, traders said.

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