LONDON: Oil extended a rally above $35 a barrel on Thursday, adding to the previous session’s 7 per cent jump, as support from a weaker dollar offset concern about ample supply and record-high US inventories.
Crude rebounded from an earlier fall after an Iranian official was quoted as saying Tehran supported a meeting between Opec and other oil producers, raising hopes they could take action to support prices despite scepticism in the market.
The dollar weakened further on speculation the Federal Reserve might not raise interest rates this year. A falling dollar tends to support oil and other dollar-denominated commodities.
“Headlines continue to fly about an Opec/non-Opec meeting. We are currently in an environment of elevated rumours,” said Olivier Jakob, oil analyst at Petromatrix.
“Without a fresh development Brent might face some difficulty to fly above $40.”
Brent crude was up 47 cents at $35.51 a barrel at 1442 GMT. Prices have gained more than 30pc since falling to $27.10, the lowest since November 2003, on Jan 20. US crude was up $1.00 to $33.28.