Oil Hits 2016 High

Oil Hits 2016 High
Oil Hits 2016 High

Oil hit its highest level this year on Wednesday, driven by a falling dollar and evidence of declining US supply, putting the price on course for its strongest monthly performance since last April.

Brent crude futures were up 85 cents at $46.59 a barrel, having earlier hit a 2016 high of $47.05. The international benchmark has risen nearly 20% in April, its largest one-month gain in a year, Reuters reported.

US West Texas Intermediate crude futures rose 85 cents to $44.89 a barrel, just off a session peak of $45.18.

Brent received extra support from news that Saudi Arabia and Kuwait appear no closer to restarting their jointly operated Khafji Oilfield, which produced 280,000 to 300,000 barrels per day before environmental problems forced a closure in October 2014.

WTI was further bolstered after the American Petroleum Institute reported a draw of nearly 1.1 million barrels in US crude inventories last week. Analysts had expected a 2.4-million-barrel build.

The dollar was down on the day, having fallen about 5% against a basket of currencies since the start of the year, even as US interest rates are expected to rise.

The prospect of an agreement among the world's largest exporters to limit production, which had provided the catalyst for a 55% rally since mid-February, evaporated almost two weeks ago when a meeting between OPEC members and their non-OPEC counterparts ended in stalemate.

Since then, Brent has hit its highest since November and, aided by further evidence of declining output anywhere from the US shale basin to the North Sea, attracted fresh investment cash.