Crude oil prices rise to $60 despite strong dollar

Oil prices rose on Monday in quiet holiday trading as the markets in the United States and much of Europe were closed. Despite a firm US dollar, Brent crude gained 53 cents to $65.90 a barrel by 1750 GMT (01:50 p.m. EDT), after touching an intraday low of $64.72. U.S. crude was up 8 cents at $59.80 a barrel.

Helping support oil price was strong demand across Asia and the United States, based on some data showing a pick-up in demand in April despite rising prices.

Japan’s customs-cleared crude oil imports rose 9.1 percent year-on-year to 3.62 million barrels per day (bpd) in April, the Finance Ministry said.

In China, crude imports hit a record 7.4 million bpd last month, with healthy car sales countering a slowing economy.

In the United States, the peak summer driving season started with Memorial Day on Monday, and the American Automobile Association said road travel was expected to reach a 10-year high over the long weekend.

However, the gains in oil prices are expected to be capped due to the strong greenback because commodities denominated in the US currency will make it more expensive for holders of other currencies to buy these commodities such as oil. Also likely to put a lid on rising oil prices is the fact that the market is will well-supplied.

Meanwhile supply will rise as Iran – a major oil producing country and a member of the Organization of the Petroleum Exporting Countries (OPEC),- aims to raise its oil output by 170,000 bpd by March 2016, the official IRNA news agency cited an Iranian oil official as saying. Iran wants to boost crude exports by up to 1 million bpd if Tehran and six major powers finalize a nuclear agreement by a June 30 deadline.

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