Oil Edges Up On Dollar Retreat After Mixed IEA Report

 

Oil rose after data showed consumer prices rising less than expected, pushing the dollar lower. A weaker dollar supports oil, making it more affordable to holders of other currencies.

 

Brent crude futures were up 15 cents from their last close at $44.33 a barrel by 1300 GMT. U.S. crude was up 13 cents at $41.89 a barrel.

 

The IEA trimmed its estimate for 2016 global demand growth from last month to 1.16 million barrels per day, but said a much-anticipated slide in production of light, tight oil in the United States was gathering pace.

 

The market was choppy ahead of a keenly anticipated producers' meeting on Sunday in Doha of the world's biggest oil exporters, including Saudi Arabia and Russia.

 

They are set to finalise a deal reached in February to freeze oil output at January levels, aiming to bolster oil prices. But many analysts think there is scope for disappointment after the meeting.

 

"There is hope going into the talks that supply will be frozen, and there will be lots of volatility in the next two days, but there is potential for disappointment," said Frank Klumpp, analyst at LBBW in Stuttgart.

 

Russian oil minister Alexander Novak told a closed-door briefing of energy analysts in Moscow on Wednesday that the deal would be loosely framed with few detailed commitments.

 

"The agreement will not be very rigidly formulated, it is more of a gentlemen's agreement," one of those present said, paraphrasing Novak's words at the briefing.

 

"There is no plan to sign binding documents," another person at the briefing said.

 

This suggests producers are unlikely to formally agree to rein in production, which now stands at about 2 million barrels per day (bpd) in excess of demand.

 

An oil output cut by global producers, following on from the output freeze initiative, is quite unlikely and would be months away, OPEC sources said, suggesting any additional action to boost prices is remote.