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Oil edges higher, helped by weaker dollar

Oil prices edged higher on Friday as a weaker denominating currency, the U.S. dollar, kept levels near the previous day’s highs.

Brent crude futures were up 14 cents a barrel higher at $46.18 per barrel by 1319 GMT, from a three-week high of $46.66 earlier in the day.

U.S. West Texas Intermediate (WTI) crude stood at $43.72 a barrel, up 23 cents after touching its highest level since July 25, at $44.17 per barrel.

The dollar weakened after U.S. retail data showed sales were flat for July, against expectations of a modest rise.

Both price benchmarks rose more than 4 percent on Thursday after Saudi Arabia’s energy minister Khalid al-Falih said that oil producers would discuss potential action to stabilize oil prices during a meeting next month in Algeria.

“Yesterday was a big move in reaction to the Saudi oil minister’s comments. Now today there is a reassessment but the comments are probably not enough to trigger a sustained rally,” Olivier Jakob of consultancy Petromatrix in Zug, Switzerland said.

An outlook published by the International Energy Agency (IEA) that said it expected the supply and demand balance to tighten towards year-end also supported prices.

Traders said a drop of 8.1 percent in China’s oil output in July, to a five-year low of 16.72 million tonnes, also lifted prices because it would mean Asia’s biggest economy has to import more crude.

Oil prices are still more than 12 percent below their last peak in June, as brimming storage tanks and production that exceeds consumption weighs on markets.

Iran slashed its September official selling price for light crude to Asia by $1.30 a barrel, the latest sign that exporters are willing to accept discounts in return for market share.

AB Bernstein said global oil production rose almost 0.8 million barrels per day (bpd) in July from the previous month, to 97.01 million bpd, while commercial inventories increased by 5.7 million barrels to 3.09 billion barrels in June. (Reuters)

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