Oil down 2 percent, strong dollar knocks U.S. crude off 15-month highs
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Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford/File Photo
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By Ethan Lou
NEW YORK (Reuters) - Oil prices settled down more than 2 percent on Thursday, as a resurgent dollar encouraged players to take profit on the previous day's rally that sent U.S. crude to 15-month highs.
The dollar hit seven-month highs against a basket of currencies <.DXY> and a three-month peak versus the euro
Benchmark Brent crude for December delivery
U.S. West Texas Intermediate (WTI) crude's November contract
On Wednesday, oil rallied after the U.S. government reported an unexpected drawdown of more than 5 million barrels in weekly crude stockpiles that drove WTI's November contract to a 15-month high of $51.93. [EIA/S]
"This is predominately being driven by the dollar's strength," Matt Smith, director of commodity research New York's ClipperData said, referring to Thursday's retreat.
"It's also to do with the dust settling on yesterday's report and the realization that it wasn't quite as bullish."
Some market participants noted that despite the crude drawdown, the EIA also reported an unexpected build of 2.5 million barrels in gasoline stockpiles instead of the drop that was forecast.
There was also growing skepticism about the Organization of the Petroleum Exporting Countries' (OPEC) upcoming plan to limit production, said Tariq Zahir, trader at Tyche Capital Advisors in New York.
"The comments overnight, of (OPEC) talking with Russia about whether they can increase their production levels, is putting into doubt whether there is going to be an agreement," he said.
The chief executive of Russia's Rosneft
Despite Thursday's drop, oil prices are still up about 13 percent since OPEC announced on Sept. 27 its first planned output cut in 8 years to rein in a global glut that halved prices from mid-2014 highs above $100 a barrel.
French oil industry officials differed in their market outlook at a conference in Paris, with Total's
(Additional reporting by Barani Krishnan in NEW YORK and Sabina Zawadzki in LONDON; Editing by William Hardy, Alistair Bell and David Gregorio)
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Create E-mail Alert Related CategoriesCommodities, Reuters
Related EntitiesEuropean Central Bank, Crude Oil, OPEC
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