Oil prices fall as United States dollar firms

Oil prices fall as United States dollar firms”

Brent crude fell from a two-week high as the market weighed forecasts for a surge in US production against OPEC's success in accelerating the pace of draining a global glut.

West Texas Intermediate for March delivery, which expires Tuesday, rose 0.7 percent to $62.10 a barrel on the New York Mercantile Exchange.

A weaker greenback potentially supports consumption of dollar-denominated commodities as it makes fuel and raw materials cheaper for countries using other currencies.

Brent crude futures were at $65.48 per barrel, down 19 cents, or 0.3 percent, from their last close.

Overall, however, the oil markets remain well supported by the limited supply by the Organization of Petroleum Exporting Countries (OPEC), the measures being taken early past year to reduce stockpiling and rebuild prices.

Brent, the global benchmark, has seen its premium pricing over WTI - known as the spread - wither in recent weeks. A weaker greenback boosts the appeal of commodities priced in the USA currency.

Global oil demand for 2018 was estimated to grow by 1.6-million barrels a day due to an "encouraging environment", he said.

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Suhail Al Mazrouei, the Minister of Energy and Industry of the UAE, which now holds the Opec presidency, said that a draft framework for a long-term alliance will be finalised in 2018, reported The National.

Non-OPEC stocks outside North America are also believed to decline this year and the next. Strong U.S. supply growth will be met by rising demand globally, he said.

Al Mazrouei has some hope that the draft framework could even be endorsed and signed by all 24 countries before the end of the year.

Saudi Arabia - not least in an attempt to give the planned listing of its state-owned oil giant Saudi Aramco a boost - is keen for Russian Federation and other producers to keep withholding supplies to prop up prices.

Threatening to undermine the Opec-led effort to tighten markets is soaring production in the United States, which is not participating in the pact to cut.

The American Petroleum Institute (API) is set to state its forecast regarding the U.S. crude supply on Wednesday.

The US dollar is now trading at its lowest level in more than three years having lost two and a half per cent of its value against other currencies this year, pushing up the price of commodities including gold. Europe's main indexes were fairly stable on Tuesday but Asian markets closed broadly lower, with the Nikkei 225 closing down 1 percent, South Korea's Kospi falling 1.13 percent and the Shanghai Composite slumping 0.46 percent.

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