Oil prices dip on strong dollar, firm global supplies
Oil prices slipped in Asian trade on Monday, hit by a strong
dollar and signs that global crude supply is holding up even as
unplanned outages rise to at least a five-year high, Reuters
reported.
In a further sign of abundant supply the number of rigs operated by
U.S. drillers was steady last week for the first time this
year.
Brent futures LCOc1 were down 14 cents at $48.58 a barrel as of
0154 GMT, after ending the previous session 9 cents down.
U.S. crude futures CLc1 fell 25 cents to $48.16 a barrel, after
settling down 41 cents in the previous session.
The dollar index .DXY was marginally lower in early trade on Monday
after gaining for a third straight week last week.
That came as U.S. crude rose 3.3 percent last week, while Brent was
up 1.7 percent, as unplanned supply outages rose to the highest
since at least 2011 due to wildfires in Canada and losses in
Nigeria, Libya and Venezuela.
But global oil supply still outstripped demand by around 1.5
million barrels per day, Russian Energy Minister Alexander Novak
said on Friday.
"It's hard to trade with the current volatility in oil prices,"
said Jonathan Barratt, chief investment officer at Sydney's Ayers
Alliance.
"We've run up from $44 a barrel on economic growth and outages. Are
we now at the top end? Does that mean at $49-$50 a barrel we'll get
U.S. oil shale production starting up?"
The number of U.S. rigs last week drilling for oil was unchanged
for the first time this year as crude futures trade near a
seven-month high.
"With the U.S. rig count steady, people are waiting to see whether
producers will start turning some production back on," Barratt
added.
That came as the chance appeared to increase of an interest rate
hike by the U.S. Federal Open Market Committee at its June
meeting.
"Market odds of a June rate hike ended the week at around 30
percent, up from 4 percent a week ago. That is a significant
repricing," analysts at banking group ANZ said in a market report
on Monday. "We continue to see June as very much a 'live'
meeting."
Iran plans to increase oil export capacity to 2.2 million barrels
by the summer and has no plans to freeze its level of oil
production and exports, Deputy Oil Minister Rokneddin Javadi was
quoted on Sunday as saying.
Tehran is trying to raise its crude exports to pre-sanctions
levels.
A meeting of the OPEC exporters' group, including Iran, is
scheduled for June 2.
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