Oil Markets Mixed On Lower Canadian Flows, Firmer Dollar

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Brent crude fell from a two-week high as the market weighed forecasts for a surge in USA production against OPEC's success in accelerating the pace of draining a global glut.

European shares rose for a fourth straight session, with global stocks set for a sixth session of gains, following a sell-off triggered by fears of creeping inflation and higher borrowing costs.

A strengthening dollar, which hit a six-day high, however, weighed on oil prices. Pay attention to the U.S. dollar, if it continues to selloff that could help Brent markets, but right now I think that oversupply is going to continue to be a major issue. "The weaker dollar has been extremely supportive to crude", said Bill Baruch, president and founder of Blue Line Futures.

Brent crude was up 34 cents at US$65.18 a barrel at 1356 GMT, after rising to an 11-day high of US$65.45 a barrel earlier in the session. The global benchmark traded at a $3.31 premium to April WTI.

US West Texas Intermediate crude for March delivery was up 46 cents at US$62.14 a barrel, after earlier gaining as much as 1.4 per cent to its highest since February 7. WTI gained 4 per cent this week after losing almost 10 per cent last week.

Money managers slashed their bullish wagers on ICE Brent crude oil futures by the most in almost eight months in the week to February 13, data showed. The number of rigs operating in US oil fields added by seven to a total of 798 rigs for the fourth consecutive weekly increase, oilfield service firm Baker Hughes said in its weekly report on Friday.

OPEC's biggest producer, which has cut output since a year ago under an agreement between OPEC and other producers to ease a supply glut, pumped 9.980 million bpd of oil in December, according to the data from the Joint Organizations Data Initiative (JODI).

According to the calculations of the Energy Information Administration (EIA), weekly production of raw materials in the USA rose to a historic high of 10.27 million barrels per day for the week by February 9.

A little-noticed addition to the United States budget deal approved last week was also expected to further boost USA crude production by more than tripling a tax credit to producers for injecting carbon dioxide back into the earth to increase output.