Dollar weakness, US data buoys Oil June-19-2015

 Commodity

Crude oil futures soared more than 1.3 per cent in the domestic market on Thursday as investors and speculators booked fresh positions in the energy commodity tracking a bullish trend in the overseas market as a weaker dollar boosted the demand for oil as an alternative investment.

Weaker greenback makes crude cheaper for those holding other currencies, thus bolstering demand. The dollar slipped against a basket of key currencies after the US Federal Reserve signaled that it would go easy on the pace of rate hikes in the world’s biggest economy.

A seventh straight weekly decline in US crude stockpiles eased fears over a global supply glut.

The number of Americans who filed for seeking unemployment benefit claims fell last week, a leading index rose more than forecast in May while manufacturing activity in the Philadelphia region accelerated in June, signaling an improving US economic outlook, auguring well for oil demand.

US jobless claims fell by 12,000 to the lowest level since May 9, 2015 to 267,000 in the week ended June 13, 2015. The US leading index rose 0.7 per cent in May from April, when it also climbed at the same pace, topping analysts’ forecasts for a 0.4 per cent gain. The gauge measuring manufacturing activity in the Philadelphia region climbed to 15.2 in June from 6.7 in May, with a reading above zero signaling expansion.

Oil may extend an advance today as a pickup in the US economy lifts crude demand outlook.

At the MCX, Crude oil futures, for the June 2015 contract, closed at Rs 3,846 per barrel, up by 1.34 per cent, after opening at Rs 3,795, against the previous close price of Rs 3,795. It touched an intraday high of Rs 3880.