Oil rose on Thursday, encouraged by a weaker dollar and evidence of strong US fuel demand, though demand prospects remain clouded by the turmoil engulfing emerging markets and an escalation in the US trade dispute with China, reports Reuters.
Emerging market stocks, bonds and currencies have plunged in recent weeks in response to financial crises in the likes of Turkey, South Africa and Venezuela.
The dollar eased by about 0.1 per cent against a basket of major currencies on Thursday. But it has gained 3.3 per cent this year and has benefited from the flight out of emerging-market assets. As a result, major oil consumers are finding their import bills rising quickly.
Brent crude futures were up 39 cents at $77.66 a barrel by 0942 GMT, still short of Tuesday's high near $80. US futures were up 12 cents at $68.85.
"In the last week we've seen the focus shift again from supply back to demand and the continued calamity in emerging market stocks, bonds and currencies is weighing on the medium and longer-term demand outlook," said Saxo Bank senior manager Ole Hansen.
"We did see quite a lot of momentum last week and then oil was shot down in flames after its failed attempt to break above $80 ... now we have the extra dimension of a spike in oil prices that can only increase the pain (for consumers) and the risk of a slowdown in demand."
