Oil gains, aiming for four winning sessions in a row

Flames emerge from a pipeline at the oil fields in Basra, southeast of Baghdad, September 30, 2016.

Oil prices have risen for the fourth consecutive session due to a weaker dollar, with gains limited due to persistent concerns about the global oversupply.

Oil settled higher Monday, tallying their third straight session of gains, despite ongoing pressure from expectations of further growth in USA output.

With the end of the quarter approaching, brokers said investors were covering short positions.

US West Texas Intermediate (WTI) crude futures were up 44 cents, or 1.0 per cent, at $43.45 per barrel. Shale drillers added oil rigs for a record 23rd straight week as a growing backlog of unfinished wells - and the crude that will eventually flow from those projects - threatens to add to the global glut.

Brent touched a one-week high of $47.06.

The petroleum complex has moved moderately higher on expectations that US commercial crude inventories may have declined by two or three million barrels in the week ended Friday, Evans added.

The latest inventories data will move back into focus in the short term with the API data on Tuesday and official EIA release on Wednesday.

The dollar fell 0.1 percent against a basket of six major currencies, before a speech by U.S. Federal Reserve Chair Janet Yellen in London.

A pumpjack drills for oil in the Monterey Shale, California, April 29, 2013.

Worldwide oil prices have been dropping in recent months despite an agreement between members of the Organization of Petroleum Exporting Countries (OPEC) and nonmembers to cut production.

The cuts began in January and were later extended through March. "The upside potential for US output could be limited because of the lower price".

"Exchange data showed that speculators had cut their net long positions in WTI and Brent to (the) lowest level in 10 months last week", ANZ said in a note.

"The perception is that we're going to have slower exploration activity, but the amount of drilling that we've been doing is going to guarantee production growth for at least another four or five months", said James Williams, president of energy consultant WTRG Economics in London, Arkansas, "So you've still got the downward pressure there".

  • Jon Douglas