LONDON (Reuters) – Oil rose towards $95 a barrel on Monday, supported by a weak dollar and after some OPEC members pushed for action to stem their declining purchasing power.
OPEC’s heads of state summit in Riyadh ended on Sunday without signaling whether the producer group would agree to pump more oil at its December 5 policy meeting in Abu Dhabi.
But of greater interest to investors was the push by Iran and Venezuela — both locked in diplomatic rows with Washington — for action to offset the falling value of their dollar-denominated oil revenues.
U.S. light crude was up 77 cents at $94.61 by 5:52 a.m. EST. It rose more than $1 in earlier trade to $95.15.
London Brent crude rose 54 cents at $92.16 after rising to $92.81.
“OPEC talk about prices being undervalued and its concerns with the falling dollar are all filtering into the market,” said Mark Pervan of ANZ Bank in Melbourne.
“There are pockets of bullish news out in the market and no bearish news at all.”
While the weak dollar was omitted from the summit’s final statement, traders say the growing concern over the U.S. currency’s predicament could prompt OPEC to seek a higher price.
Goldman Sachs said it did not believe the tumbling dollar was the main driver behind oil’s rally, but rather tight global oil supplies.
“We believe the currency impact on crude oil prices has been minimal and maintain that cyclical and structural factors have been the primary drivers behind the recent crude oil price rise,” it said in its weekly energy report.
Oil has slid from an all-time high of $98.62 a barrel struck on November 7, as traders fretted about weakening oil demand in the world’s top consumer and U.S. crude stocks unexpectedly rose, although the looming winter has lent fresh support.
Iran’s president Mahmoud Ahmadinejad said the market price of oil was still undervalued.