US oil prices end above US$50 for first time since July

An oil pumpjack near Tioga, North Dakota.
An oil pumpjack near Tioga, North Dakota.PHOTO: AFP

NEW YORK (AFP) - US oil prices finished above US$50 a barrel for the first time since July on Tuesday as a tightening supply picture and a weaker dollar further boosted the commodity.

US benchmark West Texas Intermediate for July delivery rose 67 cents to US$50.36 a barrel on the New York Mercantile Exchange, capping a rally from the low near US$25 a barrel in February.

Analysts said ongoing uncertainty about Nigeria's outlook for petroleum production was strengthening the oil market.

Nigeria's government and military chiefs met governors of oil-producing states after announcing it planned peace talks with militants who have repeatedly attacked pipelines and installations, slashing output.

Attacks have cut output to 1.6 million barrels per day, well below the budgeted-for 2.2 million barrels per day, heaping further pressure on an economy badly hit by the global fall in the price of crude since mid-2014.

Analysts said oil was also boosted by a dip in the dollar against major currencies after Federal Reserve chairman Janet Yellen on Monday emphasized that interest rate increases would be gradual after Friday's very weak jobs report.

A weak dollar can boost demand for crude, which is sold on global markets in the US currency.

"A good portion of what we're seeing during the last couple of days is a reaction to the anticipation the Fed will not change its interest rates and that's leading to a weaker dollar," said James Williams of WTRG Economics.