Oil price continued its fall for a fifth day as surging U.S. output and a rising dollar sent crude to its biggest drop in two months.
Futures fell as much as one per cent in New York after Department of Energy data showed U.S. crude production jumped to a record 10.25 million barrels a day last week. The global Brent benchmark slipped below $65 for the first time since late December.
The U.S. continues to be the biggest obstacle to the Organisation of Petroleum Exporting Countries (OPEC) efforts to stem a global oversupply. American crude production has now eclipsed Saudi Arabia’s output, and Citigroup Inc. expects it to breach 11 million barrels a day by the end of summer, several months earlier than the U.S. government’s own forecast. A rising dollar in recent days has also weighed on prices.
“Supply looks quite healthy and that’s taking the edge off oil prices,” said Nitesh Shah, a commodities analyst at ETF Securities in London. “A few of the catalysts that held up prices in January are fading away.” Rising U.S. supplies and rig counts have added to the dollar’s pressure on prices, he said.
West Texas Intermediate for March delivery fell 45 cents to $61.34 a barrel on the New York Mercantile Exchange. The grade suffered its biggest drop in two months on Wednesday after the publication of U.S. inventory data. Prices are heading toward their longest stretch of declines since April.
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