Crude oil prices gathered momentum in early Asia trade Friday on a weakening greenback, and as traders move beyond the growing surplus to focus on the declining trend in production. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $43.84 a barrel at 0156 GMT, up $0.66 or 1.5% in the Globex electronic session. June Brent crude on London's ICE Futures exchange rose $0.68 or 1.5% to Prices fell overnight after European Central Bank President Mario Draghi said European interest rates would remain at current or lower levels for an extended period. His comments sparked a rally in the dollar, as they were interpreted by the market that further stimulus measures would be forthcoming. The U.S. dollar pared gains and was last down 11 cents or 0.13% at $86.10 in Asian trading hours, according to the Wall Street Journal Dollar Index, which measures the value of the greenback against 16 foreign currencies. As oil prices are pegged to the dollar, a weaker greenback makes oil products are cheaper for traders holding foreign currencies. Overnight prices were also weighed down by the resumption of crude production in Kuwait back to around 3 million barrels a day after the recent strike. "It is a very volatile market at the moment, and it will stay this way for a while," said Vyanne Lai, a commodity analyst at National Australia Bank. The prolonged collapse in prices has resulted in a decrease in investment in the upstream industry, in particular, among the U.S. shale producers who are likely to decrease output by 700,000 barrels a day this year, said Fatih Birol, head of the global energy watchdog International Energy Agency. While U.S. production will recover eventually, supply from other non-OPEC producers such as Russia, China, Mexico and Colombia will fall throughout the period due to a lack of new investment, Mr. Birol said Thursday at a news conference in Japan. "We can expect the market to come back to balance in 2017. From 2018 onward there will be stock draws, leading to a gradual increase in price levels," he said. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--rose 175 points to $1.5334 a gallon, while May diesel traded at $1.3190, 192 points higher. ICE gasoil for May changed hands at $394.25 a metric ton, up $1.00 from Thursday's settlement.
