NEW YORK (DTN) -- New York Mercantile Exchange oil futures were higher Friday morning as the dollar weakened further and the Russian air campaign in Syria generates a geopolitical risk premium for oil prices, with technical support adding to the oil complex's advance.
Technical analysts said the spot-month NYMEX West Texas Intermediate contract turned short-term bullish after breaching resistance at $50.16, a price that marks the 50% Fibonacci retracement of the prior downtrend, rising to an 11-week spot high at $50.92 barrel.
At 8 a.m. CDT, NYMEX November WTI crude futures rose 76 cents to $50.19 bbl. The ICE November Brent crude futures contract climbed 34 cents to $53.39 bbl, off a fresh five-week spot high of $54.05.
In products trade, NYMEX November ULSD futures edged up 1.47 cents to $1.6165 gallon, off a five-week spot high of $1.6379. NYMEX November RBOB futures nudged up 1.23 cents to $1.4201 gallon, off a two-day high of $1.4366.
On Wall Street, stock indices moved higher while the dollar index fell to a three-week low on risk-on trade. A weaker dollar is bullish for oil futures.
Investor enthusiasm is running high on the prospect of continued easy money policy by the Federal Reserve.
It follows Thursday's release of Fed meeting minutes showing policymakers wanted to hike interest rates in September but held off because of China's economic slowdown and its potential to derail U.S. growth coupled with low inflation. Given recent weak economic data, expectation for a rate hike has fallen even lower.
On the geopolitical front, the odds of political instability in the oil-rich Middle East have increased since Russia initiated the bombing of Syrian targets about a week ago, with the majority of the cruise missiles deployed targeting U.S.-backed rebel soldiers, according to reports.
The North Atlantic Treaty Organization, a defense alliance of North American and some European nations created in the wake of World War II, has said it is prepared to send troops to Turkey, whose territorial integrity was violated twice over the weekend by Russian fighter jets. The situation could deteriorate further if there's a confrontation between Russian and U.S. military forces.
Phil Flynn, an analyst at Price Futures in Chicago, said unconfirmed reports of a possible meeting later this month between the Organization of Petroleum Exporting Countries and non-OPEC also boosted oil futures.
Previous attempts for collaboration between the two oil producing groups have failed, so it's hard to believe this time will be different and the market is treating such speculation with the caution, said analysts. Saudi Arabia is against cutting output, and OPEC is producing about 1.0 million barrels per day above its agreed 30 million bpd quota.
George Orwel can be reached at firstname.lastname@example.org
© Copyright 2015 DTN/The Progressive Farmer. All rights reserved.