Oil prices fall on firmer U.S. dollar
Oil prices fell on Thursday, pulled down as a firmer dollar outweighed a report of a decrease in U.S. crude inventories, Reuters reports.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $61.15 a barrel at 0640 GMT, down 53 cents, or 0.9 percent, from their last settlement.
Brent crude futures LCOc1 fell 42 cents, or 0.6 percent, from their last close to $65 per barrel.
The dollar rose to a one-week high against a basket of major currencies .DXY on Thursday, after minutes of the Federal Reserve’s January meeting showed policymakers were more confident of the need to keep raising interest rates.
“The firming dollar continues to thwart investor sentiment despite the bullish inventory data,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA.
Since oil trading is conducted in dollars, a rise in the greenback makes fuel imports for countries using other currencies domestically more expensive, potentially curbing demand.
The firm dollar outweighed a reported fall in U.S. crude inventories.
The American Petroleum Institute on Wednesday reported an unexpected drop in U.S. crude oil inventories by 907,000 barrels to 420.3 million barrels for the week to Feb. 16.
“Improved pipeline infrastructure to the Gulf coast and the decreased supply via TransCanada’s Keystone pipeline, sent ... inventories tumbling,” Innes said.
Despite Thursday’s falls, analysts said oil markets were generally well supported due to demand-growth coinciding with production restraint led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia.
“OPEC production curbs have stabilized the market. Adherence to (the) agreement has been relatively good,” Daniel Hynes, senior commodity strategist at ANZ bank, said in a report published on Thursday.