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Oil falls on strong dollar
(MENAFN- Arab News) NEW YORK: Crude oil fell on Thursday pressured by ample supply concerns about demand growth and a stronger US dollar.
Brent prices slid sharply around 11:34 a.m. EDT (1534 GMT) dropping 60 cents a barrel within 13 minutes while US crude tumbled 90 cents over the same period. Both benchmarks rebounded from session lows.
Reasons for the sudden dive were not immediately clear. Traders pinned at least part of it on the US dollar's rally to its highest in more than four years against a basket of currencies. The dollar drew support from a fall in US jobless claims and Federal Reserve interest rate forecasts that were higher than those predicted in June.
The decline in the global benchmark Brent price was limited by a drop in Libya's output and talk of OPEC production cuts. Brent hit a 26-month low on Monday after data showing a slowdown in China's factory output raised demand concerns.
A stronger dollar makes dollar-priced commodities such as oil more expensive for buyers using other currencies.
Brent was down $1.31 cents at $97.66 a barrel at 12:27 p.m. EDT (1627 GMT). Prices have declined around 15 percent from a nine-month peak of $115.71 reached in June.
A setback in Libya's output which has fallen by about 200000 barrels per day has put threats to supply higher on investors' list of concerns.
Investors were also wary of Thursday's referendum on independence in Scotland home to most of Britain's North Sea oil reserves. Analysts say the result could affect oil prices.
In addition Nigerian oil unions have launched a strike they say could affect exports although so far it has not and the secretary-general of the Organization of the Petroleum Exporting Countries raised the possibility of a supply cut in 2015.
US crude Clc1 was down 98 cents at $93.44 a barrel a day after dropping on government data that showed US crude inventories rose 3.7 million barrels last week.
"To me the market is playing off a little more of yesterday's bearish inventories. There's no shortage of oil anywhere" said Sal Umek an analyst at Energy Management Institute in New York. "People are starting to square books off and roll over into the next month. We're in the final dribs and drabs of short-covering."
Brent prices slid sharply around 11:34 a.m. EDT (1534 GMT) dropping 60 cents a barrel within 13 minutes while US crude tumbled 90 cents over the same period. Both benchmarks rebounded from session lows.
Reasons for the sudden dive were not immediately clear. Traders pinned at least part of it on the US dollar's rally to its highest in more than four years against a basket of currencies. The dollar drew support from a fall in US jobless claims and Federal Reserve interest rate forecasts that were higher than those predicted in June.
The decline in the global benchmark Brent price was limited by a drop in Libya's output and talk of OPEC production cuts. Brent hit a 26-month low on Monday after data showing a slowdown in China's factory output raised demand concerns.
A stronger dollar makes dollar-priced commodities such as oil more expensive for buyers using other currencies.
Brent was down $1.31 cents at $97.66 a barrel at 12:27 p.m. EDT (1627 GMT). Prices have declined around 15 percent from a nine-month peak of $115.71 reached in June.
A setback in Libya's output which has fallen by about 200000 barrels per day has put threats to supply higher on investors' list of concerns.
Investors were also wary of Thursday's referendum on independence in Scotland home to most of Britain's North Sea oil reserves. Analysts say the result could affect oil prices.
In addition Nigerian oil unions have launched a strike they say could affect exports although so far it has not and the secretary-general of the Organization of the Petroleum Exporting Countries raised the possibility of a supply cut in 2015.
US crude Clc1 was down 98 cents at $93.44 a barrel a day after dropping on government data that showed US crude inventories rose 3.7 million barrels last week.
"To me the market is playing off a little more of yesterday's bearish inventories. There's no shortage of oil anywhere" said Sal Umek an analyst at Energy Management Institute in New York. "People are starting to square books off and roll over into the next month. We're in the final dribs and drabs of short-covering."
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