Oil Slips Amid Rising U.S. Crude Supplies and Dollar Rally
(Bloomberg) -- Oil slid as the dollar surged and after a U.S. government report showed crude stockpiles rose for the first time in eight weeks.
Futures in New York ended the session 0.6% lower after a choppy trading session on Wednesday. A more-than 4 million-barrel increase in U.S. crude stockpiles tugged futures lower, while a stronger dollar made exports of the commodity less attractive.
“This dollar strength has reached a level that can’t be ignored,” said John Kilduff, a partner at Again Capital LLC.
Oil’s advance earlier this week -- and Brent’s surge above $80 a barrel -- reflected signs of a tighter global market amid stronger demand and rising natural gas prices. Higher energy costs this month have stoked speculation that the Organization of Petroleum Exporting Countries and its allies may ease supply cuts more quickly. The White House said Tuesday it’s continuing to talk to OPEC and other international partners about the importance of competitive markets and doing more to support the recovery.
Meanwhile, world oil supply is expected to be 1.2 million barrels a day below demand in October, and 900,000 barrels a day in November, according to a OPEC secretariat document being reviewed by the group’s Joint Technical Committee.
In addition to the crude stockpile rise in the U.S. last week, gasoline inventories rose for a second week and distillate inventories climbed for the first time since late August, Energy Information Administration data show. Yet, U.S. crude exports jumped above 3 million barrels a day, signaling stronger global demand.
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