Crude Oil Ends Higher As Dollar Weakens; Gains 0.6% For Week

(RTTNews) - U.S. crude oil ended sharply higher on Friday, as the dollar weakened against a basket of major currencies on the continued tensions between Russia and the West over Ukraine. Even as lawmakers in Russia finalized the annexation of Ukraine's Crimea region, the U.S. and Europe imposed further sanctions on the beleaguered country, fueling investor concerns over the supply scenario with Russia being a major oil producer and supplier.

For the week, crude oil gained 0.6 percent.

The U.S. Federal Reserve Chief Janet Yellen's hint of an interest rate hike as early as next spring, ignited further concerns. Investors continued to assess the situation with the central bank poised to raise its benchmark interest rate in about a year. This indicates the bond buying program could be wound down in six months, with a possible rate hike six months later if the economy grows according to the latest Fed projections.

Fitch Ratings' affirmation of the top notch 'AAA' ratings for the U.S. helped sentiments, but a large jump in U.S. crude oil inventories has capped crude oil's gains.

Light Sweet Crude Oil futures for May delivery, the most actively traded contract, gained $0.56 or 0.6 percent to close at $99.46 a barrel on the New York Mercantile Exchange Friday.

Crude prices for May delivery scaled a high of $100.25 a barrel intraday and a low of $98.25.

Yesterday, crude oil ended lower with the dollar strengthening after the U.S. Federal Reserve Chief Janet Yellen hinted of an interest rate hike as early as next spring. The supply scenario with a more-than-expected jump in U.S. crude oil inventories last week, also weighed on oil prices.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.12 on Friday, down from its previous close of 80.19 late Thursday in North American trade. The dollar scaled a high of 80.23 intraday and a low of 80.03.

The euro traded lower against the dollar at $1.3799 on Friday, as compared to its previous close of $1.3779 late Thursday in North America. The euro scaled a high of $1.3811 intraday and a low of $1.3766.

In economic news from Europe, U.K.'s budget deficit exceeded expectations in February with public sector net borrowing excluding interventions rising to GBP 9.3 billion, compared to GBP 9.2 billion registered a year ago. The budget deficit was seen at GBP 8.6 billion.

Meanwhile, Fitch Ratings on Friday maintained the 'AAA' ratings of the United States of America and the 'stable' outlook on the country's ratings, dismissing concerns over a possible downgrade in March. The action resolved the Rating Watch Negative on which the ratings were placed last October, in line with Fitch's previous guidance that this would take place by end-March.

At the same time, rating agencies Standard and Poor's and Fitch lowered their rating outlook on Russia as the U.S. and the European Union imposed sanctions on the country after its controversial annexation of Ukraine's autonomous region of Crimea. The reduction of the outlook from Stable to Negative reflects concerns over the potential impact of the sanctions on Russia's creditworthiness.