SINGAPORE (Reuters) – Oil prices edged lower in early Asian trade on Tuesday, pushed down by a stronger dollar and still ample supply of both crude and refined products.
U.S. August crude (CLc1), set to expire on Tuesday, fell 12 cents to 50.03 a barrel by 0054 GMT. The front-month contract fell below $ 50 a barrel on Monday for the first time since April.
Brent September crude (LCOc1) was 10 cents lower at $ 56.55 a barrel, after settling 45 cents lower.
Prices also came under pressure from a strengthening dollar, which is trading close to three-month highs (.DXY) on expectations of higher U.S. interest rates. A stronger dollar makes crude more expensive for investors using other currencies.
Saudi Arabia’s domestic crude oil inventories jumped to a record in May, although the rise likely reflected the operational demands of a major new refinery rather than another sign of a global supply glut.
Brent is down about $ 7 a barrel so far this month with U.S. crude more than $ 9 lower on expectations of more Iranian supply following a nuclear deal and concerns that economic worries in China and Europe will weigh on demand.
However, Iranian oil is unlikely to hit the market until the second quarter of next year, while “there has been enough stimulus injected into the financial system to provide uplift to global growth in second half of 2015,” analysts at PIRA Energy said in a note.
“Pessimism about oil prices because of the Iran nuclear deal and economic concern about China and Europe are overblown,” they said.
U.S. commercial crude oil stocks likely fell about 2.1 million barrels in the week ended July 17, according to a preliminary Reuters survey.
Still, analysts at ANZ said “expectations of another increase in inventories at Cushing are keeping downward pressure on prices.”
The Reuters poll was taken ahead of weekly inventory reports from the American Petroleum Institute (API) due at 2030 GMT and the U.S. Energy Information Administration (EIA) due Wednesday.
(Reporting By Jacob Gronholt-Pedersen; Editing by Richard Pullin)
