HOUSTON, Jan 31 — Oil prices dipped for a second straight day yesterday, driven by ongoing evidence of rising US crude output, while wary investors sold off stocks, bonds and commodities.
Brent crude futures for March delivery settled down 44 cents, or 0.6 per cent, at US$69.02 (RM267.74) a barrel after touching a session low of US$68.40.
US West Texas Intermediate futures fell US$1.06, or 1.6 per cent, to close at US$64.50 a barrel.
Futures traded weaker in post-settlement trading after weekly inventory figures from industry group the American Petroleum Institute showed a 3.2 million-barrel increase in crude oil stocks for last week.
If the US Energy Department data today also shows an increase in inventories, it would break an 11-week streak of drawdowns. Analysts polled by Reuters forecast an average 100,000-barrel build in crude stocks.
“We certainly will get some post-settlement weakness carrying into tomorrow’s EIA data,” said Mike Sabo, senior market strategist at RJO Futures in Chicago.
“We’ve seen a substantial rise of US$10 for WTI move in the last 60 days. This could be the beginning of a possible correction,” he added.
US stocks fell for a second straight day, with the Dow Jones Industrial Average tumbling as much as 352 points, the steepest intraday point drop since May 17, hammered by a rise in bond yields and a decline in healthcare companies.
“There are some concerns that when you get a pullback in the stock market it may be killing the bullish argument that the economy is strong,” said Phil Flynn, analyst at Price Futures Group in Chicago.
With oil’s negative correlation to the dollar reaching its strongest in a month, even continued signs of robust demand for crude were not enough to ward off profit taking following last week’s rise to three-year highs.
Oil’s inverse relationship to the US dollar, whereby a stronger currency makes it more expensive for non-US investors to buy dollar-denominated assets, has reasserted itself this week.
US production is already on par with that of Saudi Arabia, the biggest producer in the Organisation of the Petroleum Exporting Countries (Opec). Only Russia produces more, averaging 10.98 million barrels per day (bpd) in 2017. — Reuters
Source: The Malay Mail Online