Oil climbs to five-week high as dollar weakens

Oil prices rose in European trade on Thursday for a second session, almost hitting five-week highs as dollar weakens against major rivals.

Such gains come after a surprise tumble in US crude inventories according to official EIA data, which overshadowed the increase US crude output to three-year highs. 

Global Oil Prices

US crude rose 1.1% to $73.24 a barrel, while Brent added 1.3% to $77.64 a barrel, with a session-low at $76.48. 

US crude rose 1.4% on Wednesday, resuming gains after a hiatus on profit-taking off five-week highs at $74.92 a barrel, while Brent climbed 0.8%, after losing 0.6% in the previous reading on profit-taking off May 2 high at $78.68.

The Dollar

The dollar index fell 0.3% on Thursday for a second session against a basket of major rivals, underpinning dollar-denominated commodities.

Recent weak US services data bolstered the case for no change in the Fed's monetary policies next week. 

US Stocks

The Energy Information Administration reported a drawdown of 0.5 million barrels in the week ending June 2, the second weekly decline in three weeks, while analysts expected a build of 1.2 million barrels.

US Production

The EIA reported a buildup of 200 thousand bpd last week in US crude production to a total of 12.4 million bpd, the highest since April 2020.

Deficit Concerns

Some analysts are sounding alarm bells over a potential huge deficit in crude supplies as Saudi production cuts deepen a 3 million bpd deficit in crude supplies during July according to some estimates.