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By Bloomberg

Oil fell amid speculation a global oversupply may persist and as the dollar’s strength eroded demand for raw materials.

Futures dropped as much as 0.9 percent in London to extend declines for a fourth day, the longest losing streak in eight weeks. While prices have rebounded this year, the rally may reverse as increases in world crude inventories resume, according to Goldman Sachs Group Inc.

Oil slumped almost 50 percent in 2014 as expanding U.S. stockpiles and production worsened a global supply glut. Brent slid 4.6 percent last week, the most since the period to Jan. 9, as stronger-than-forecast U.S. jobs data bolstered the greenback, curbing the investment appeal of dollar-denominated commodities.

“Crude still lacks fundamental momentum on the supply side,” Hong Sung Ki, a commodities analyst at Samsung Futures Inc. in Seoul, said by phone. “The dollar has surged significantly since the end of last week, which has ultimately made crude prices stay weak.”

Brent for April settlement decreased as much as 52 cents to $59.21 a barrel on the London-based ICE Futures Europe exchange and was at $59.34 at 1:16 p.m. Singapore time. The contract fell $2.85 last week. The European benchmark crude traded at a premium of $9.92 to WTI.

Long Positions

West Texas Intermediate for April delivery dropped as much as 29 cents, or 0.6 percent, to $49.32 a barrel in electronic trading on the New York Mercantile Exchange. It slid $1.15 to $49.61 on Friday. The volume of all futures traded was about 53 percent below the 100-day average.

Speculators pared their net-long position in WTI by 19 percent to 164,310 futures and options in the week ended March 3, the lowest level since November, according to data from U.S. Commodity Futures Trading Commission.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, gained 1.2 percent on Friday, the most on a closing basis since November 2011, after a report showed U.S. employers added almost 300,000 workers last month. A median 235,000 increase was forecast in a Bloomberg News survey of economists.

Oil may not reach a forecast of $65 a barrel in 2016 because supply is set to expand, Goldman Sachs said in a report on March 8. U.S. companies are raising equity and reducing debt, indicating that they plan to boost exploration and production activity later this year, it said.

Market Balance

Supply and demand will return to balance in the second half of this year, OPEC’s Secretary-General Abdalla El-Badri said on Sunday. Prices will continue to stabilize as consumption recovers, helping the global market to re-balance, Saudi Arabia’s Oil Minister Ali al-Naimi said last week.

Saudi Arabia, the world’s biggest crude exporter, led a November decision by the Organization of Petroleum Exporting Countries to maintain its output quota at 30 million barrels a day. The 12-member group produced 30.6 million a day in February, the ninth straight month it pumped above target as it sought to defend market share against U.S. shale producers, data compiled by Bloomberg showed.

In the U.S., crude stockpiles climbed to 444.4 million barrels through Feb. 27, the most in weekly records dating back to August 1982, according to the Energy Information Administration. Output rose to 9.32 million a day, the fastest pace since the Energy Department’s statistical arm started compiling the data in January 1983.