Oil Drops With Stocks as Dollar Gains

Mar 04, 2018, 03:57

Analysts said besides profit-booking by speculators at existing higher levels, fall in demand in the physical market against adequate stocks position weighed on crude palm oil prices at futures trade.

The U.S. West Texas Intermediate crude April contract, according to investing.com, was down about 0.34% at $60.80 a barrel by 07:45 GMT, just off Thursday's two-and-a-half week lows of $60.20.

The dollar rose after Federal Reserve Chairman Jerome Powell said the USA central bank would stick with gradual interest rate increases.

A stronger dollar also dented oil prices.

The oil market had put together a string of four straight days of gains before Tuesday's pullback.

Global oil prices are one of the factors taken into account while formulating the Indonesian Crude Oil Price (ICP) issued by the Ministry of Energy and Mineral Resources through the Directorate General of Oil and Gas in the first week of the following month.

US crude oil production rose to a record 10.057 million barrels per day (bpd) in November and retreated slightly in December to 9.949 million bpd, the EIA said on Wednesday.

On Wednesday, the government reported that US crude stocks USOILC=ECI rose faster than expected while gasoline inventories posted a surprisingly large increase.

US light crude CLc1 is forecast to average $58.88 a barrel in 2018, up from $58.11 in the January poll. Weekly data showed another record and further gains are expected.

"Despite the expanding output curbs by OPEC and non-OPEC members such as Russian Federation, the market has been focusing more on rising USA output since around late January", Akuta added.

The United States will overtake Russian Federation as the world's biggest oil producer by 2019, International Energy Agency (IEA) Executive Director Fatih Birol said on Tuesday.

"Then we have the volatility in the USA dollar and the implications of the tariff news to factor in", he said. "The United States will become the No.1 oil producer sometime very soon", he said. Crude prices remained under pressure from concerns that US production may be high enough to offset output cuts from OPEC and Russian Federation, he said.

"For now though, the gains in US supply are prevailing in shaping sentiment in the oil market, other analysts said".

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