Oil Prices dip below $65 as Dollar Strengthens
Crude oil futures dipped below $65 a barrel as the dollar strengthened on Monday, with a public holiday in the United States and much of Europe keeping oil trading volumes muted.
Front-month Brent crude fell 62 cents to $64.75 a barrel by 0828 GMT. U.S. crude was down 46 cents at $59.26 a barrel.
The dollar rose to its highest against the euro and yen in nearly two months and reached a one-month high against a basket of currencies.
A strong dollar makes crude oil less attractive for holders of other currencies.
“The overall fundamentals still point to a well-supplied market, a fact that should continue to put a ceiling on prices,” Barclays said.
However, the market drew support from strong demand figures across Asia and the United States.
“Global oil demand continues to surprise to the upside, with April data showing no signs of slowdown despite a pick-up in prices,” Energy Aspects said in a note.
Japan’s customs-cleared crude oil imports rose 9.1 percent year on year to 3.62 million barrels per day (17.28 million kilolitres) in April, the Ministry of Finance said on Monday.
In China, crude imports hit a record 7.4 million barrels per day (bpd) in April, with healthy car sales countering a slowing economy.
“We expect Chinese imports to be high in the second half of 2015, potentially averaging 7.5 million bpd. This is due to the start-up of 39 million barrels of commercial storage, five SPR (strategic petroleum reserve) sites and linefill for Kunming refinery,” Energy Aspects said.
In the United States, the peak summer driving season officially started with Memorial Day on Monday, and the American Automobile Association said road travel was expected to reach a 10-year high over the Memorial Day weekend.
In oil exporter Libya, warplanes from the official government attacked an oil tanker docked outside the city of Sirte on Sunday, wounding three people and setting the ship on fire, officials said.
It was the third confirmed strike by the internationally recognised government on oil tankers, part of a conflict between competing administrations and parliaments allied to armed factions fighting for control of the country four years after the ousting of Muammar Gaddafi.
Source: Reuters
