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Oil prices rise on weak dollar, supply concerns

Crude oil storage tanks are seen in an aerial photograph at the Cushing Oil Hub in Cushing, Oklahoma, U.S., on April 21, 2020. REUTERS/Drone Base

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  • Basra oil exports return to normal after spill – Company
  • Shell plans October shutdown at Bonga oil production vessel in Nigeria

SINGAPORE, Sept 19 (Reuters) – Oil prices rose in early Asian trade on Monday as a weaker dollar and supply concerns offset fears of a global recession dampening energy demand ahead of European Union sanctions on Russian oil in December.

Brent crude futures were up $1.15, or 1.3%, at $92.50 a barrel by 0049 GMT after settling 0.5% on Friday. US West Texas Intermediate crude was at $86.16 a barrel, up $1.05 or 1.2%. Next month’s contract expires on Tuesday.

Both contracts, which fell more than 1% last week on concerns that another interest rate hike by the Federal Reserve could slow global growth, were pulled from multi-year highs by a weaker dollar. A weaker US dollar makes dollar-denominated goods less expensive for holders of other currencies.

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In China, COVID-19 restrictions have been eased in Chengdu, a southwestern city of more than 21 million people, the world’s no. 2 has eased concerns about consumer demand for fuel. China’s gasoline and diesel exports also rebounded after Beijing issued fresh quotas, easing high local inventories. Read more

Despite questions about the future of the world economy, the chief executive of Kuwait Petroleum Corporation (KPC) said on Sunday that its customers wanted the same volumes without any change. Read more

The Gulf state currently produces more than 2.8 million barrels of oil per day, in line with its OPEC quota.

Elsewhere, oil loading and export operations from Iraq’s Basra Oil Terminal returned to normal on Saturday, Basra Oil Company said, a day after it was halted by a spill. Read more

In Nigeria, Shell’s 200,000 barrels per day Bonga deepwater storage and offloading vessel is scheduled for maintenance in October, a spokesman said on Sunday.

US energy firms last week added oil and natural gas rigs for the first time in three weeks, pointing to higher supplies from the United States.

The oil and gas rig count, an early indicator of future output, rose 4 to 763 in the week to Sept. 16, the highest since August, energy services firm Baker Hughes Co said on Friday.

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Reporting by Florence Tan; Edited by Lincoln Feist

Our criteria: Thomson Reuters Trust Principles.

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