Oil firms before US inventories

Oil prices rose Wednesday before the release of US inventories data, but a pick-up in the dollar and rising Iranian crude output limited gains, analysts said.

Crude closed lower for the third straight session Tuesday on renewed worries about a global supply glut as the United States and China released disappointing manufacturing data indicating ongoing weaknesses in the two economic giants.

Traders are waiting for the release later Wednesday of US weekly stockpiles data, which is used as a gauge for demand in the United States, the world's biggest oil consumer.

Analysts expect an increase that would keep inventories at more than 80-year highs.

Around 1115 GMT, US benchmark West Texas Intermediate for delivery in June was up 17 cents at $43.82 a barrel.

Brent crude for July delivery added 22 cents to $45.19 a barrel.

Prices have surged over the past month hitting 2016 highs on signs of economic improvement in China, a weaker dollar and hopes that stalled talks on limiting output could be revived by oil producing nations.

However, the greenback rallied on Wednesday after two regional officials of the Federal Reserve said an interest-rate increase could be considered next month at a meeting of US central bank policymakers.

A stronger greenback makes oil, which is priced in dollars, more expensive for customers using rival currencies.

Margaret Yang, an analyst with CMC Markets in Singapore, said in a client note that "rising Iranian crude production has also added to the concern of oversupply as recent data shows daily output has surged to 3.5 million barrels".

Tehran has been ramping up production after Western sanctions linked to its nuclear programme were lifted in January, further adding to the oversupplied market.

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