SXY's rise is due IMHO to the over 2 per cent rise in the Brent...

SXY's rise is due IMHO to the over 2 per cent rise in the Brent crude oil price to a near one-month high of $US54.17 a barrel, supported by an unplanned production outage in the North Sea and expectations of a drawdown in US crude and product inventories.

In the North Sea, production of crude oil from Britain's 180,000 barrel per day Buzzard field was temporarily halted while repair work is carried out at an onshore processing terminal, trading sources said, noting normal output should be restored in the coming day or two.

Meanwhile, US crude stocks fell by more than expected last week, dropping by 1.8 million barrels compared with analysts' expectations of a 435,000 barrel decline.

Yet global inventories remain high. UBS analyst Giovanni Staunovo said OPEC was taking longer than expected to tighten the oil market but recent data suggested the process was now well under way.
"We believe the implemented production cuts will trigger a material drawdown in OECD oil inventories and thus higher crude oil prices," Staunovo said. "We expect Brent oil prices to rise above $US60 a barrel in three months."

An unplanned outage in the North Sea has helped lift oil prices. Photo: Hakon Mosvold Larsen