Oil market extends losses

20/07/2016 05:20 AST

Oil prices slipped on Tuesday as a rallying dollar and a global fuel glut offset forecasts for a ninth straight weekly drop in US crude stockpiles.

A protest over wages that shut the eastern Libyan oil terminal of Hariga and forced a suspension of 100,000 barrels per day of crude production helped the market limit losses though, traders said.

Brent crude futures were down 20 cents at $46.76 barrel by 12:07 p.m. EDT (1602 GMT), after trading as high as $47.49. US crude's West Texas Intermediate (WTI) futures slid by 40 cents to $44.84, after a session high at $45.67. Brent was also at its biggest premium to WTI since the end of April, raising the export potential for US crude.

The dollar index rose to a four-month high, making greenback-denominated oil less affordable for holders of the euro and other currencies.

"Today's action is much of the same we have seen over the last few weeks, which is consolidating recent gains within a narrow trading range," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.

Fuel inventories across America, Europe and Asia are brimming from oversupply, weighing on oil prices despite falling US crude stockpiles.

A Reuters poll showed US crude stockpiles likely fell 2.2 million barrels last week, declining for a ninth week in a row. The American Petroleum Institute (API), a trade group, will be issuing its own inventory report at 4:30 p.m. EDT, before official data on Wednesday from the US government.

The market's attention has gravitated more toward the glut in fuels, unexpected during the peak summer driving season. Weak prices have prompted traders to store diesel on tankers at sea for later delivery, as storage on land tightens. Even if crude output tapers, some traders say sustained price recovery will be hard due to the glut.

Arab News