A weaker greenback makes dollar-denominated crude less expensive for users of other currencies, potentially spurring fuel demand.
On the supply front, the think tank notes that output in the U.S. has begun to rise again, especially in the shale oil sector, which had been badly hit by the oil price slump. US oil production levels remained relatively constant despite low oil prices and declining investment. This represents an upward revision of 10 tb/d, mostly due to an expected uptick in oil requirements in OECD Europe in 1Q17. The price collapse prompted a group of 20 oil producers from within and outside the Organization of the Petroleum Exporting Countries to agree on an output cut past year.
According to Reuters, Saudi Arabian Energy Minister Khalid al-Falih said that 1.5 million of the agreed-upon 1.8 million barrels of oil have been removed from the market this month. "We are already seeing stocks coming down from the high levels".
The agency also provided a positive data showing a drop in commercial oil inventories in the major industrialized countries for a fourth consecutive month in November, with another decline projected for December.
The arrival of driving season in the Northern Hemisphere helped prices recover to $50 by July, but historically low global demand kneecapped any further recovery, as prices floundered between the $40 to $50 range for the remainder of the year.
On Friday Baker Hughes, the oil service giant, revealed that the number of active US rigs drilling for oil jumped higher by 29 to 551 rigs this week.
As Jallikattu protests continue, TN CM seeks legal options to remove ban
The court had earlier in 2014 banned Jallikattu on grounds of animal cruelty. Thousands of students had yesterday protested against the ban in Tamil Nadu.
That worry was reflected in the price movement overnight.
The U.S. Energy Information Administration added to concerns by reporting Thursday that crude stockpiles rose by 2.3 million barrels in the week ended January 13-defying some market expectations for a decline. The increase upended analysts' expectations for a much smaller expansion.
USA commercial crude inventories rose by 2.3 million barrels in the week through January 13 to 485.5 million barrels, well above market expectations, said the administration.
Cutting oil supply is meant to raise oil prices somewhat, creating a more balanced oil market between producers and buyers.
The Organisation of Petroleum Exporting Countries agreed to reduce its supplies by 1.2 million barrels a day starting this month at a November 30 meeting, while 11 non-members including Russian Federation and Kazakhstan pledged less than two weeks later to curb output by nearly 600,000 barrels.