Saturday, 21 March 2015 00:41
LONDON: World oil prices dropped on Friday with the market under persistent pressure from large supplies of crude and a strong dollar, traders said.
US benchmark West Texas Intermediate for delivery in April fell 51 cents to $ 43.45 a barrel.
Brent North Sea crude for May slipped 57 cents to $ 53.86 a barrel around midday in London.
“Market sentiment seems to be dominated by inventories this week, with levels across Europe, Asia and the US building steadily over the past week,” said Kash Kamal, senior research analyst at Sucden brokers.
Markets are tracking the global supply glut, made worse by the 10th straight weekly increase in US crude inventories.
Data from the US Department of Energy on Wednesday showed US crude stocks jumped 9.6 million barrels for the week ending March 13, taking inventories to the highest level in at least the last 80 years.
“Traders are still wary of the oversupply situation,” said Ric Spooner, market analyst with CMC Markets in Sydney.
Spooner told AFP that the supply glut shows no signs of diminishing after the Kuwaiti oil minister on Thursday said that members of the OPEC cartel have no choice but to maintain current production levels — despite falling prices — in order to preserve their market share.
Kuwait is a key member of the Organization of the Petroleum Exporting Countries that pumps about one-third of the world’s oil.
OPEC’s decision in November to keep production unchanged sent oil prices plunging. World crude futures have collapsed by about 60 percent since June.
The oil market surged briefly on Wednesday after the US central bank signalled it was in no hurry to raise rates, which sent the dollar tumbling.
A weaker US currency makes dollar-priced oil cheaper for holders of rival currencies, fuelling demand. But the dollar quickly rebounded, causing the reverse.
Copyright AFP (Agence France-Presse), 2015
