Oil drops for second session even as dollar falls off two-week high

2018-03-13 19:41:04 GMT (Economies.com)
Oil drops for second session even as dollar falls off two-week high

Oil futures fell nearly one percent in American trade even as the dollar index fell off early March highs for the third straight session, following earlier data from the US, the world's largest energy consumer. 


As of 05:55 GMT, US West Texas Intermediate (WTI) April futures fell 1.21% to $60.62 a barrel from the opening of $61.36, while Brent futures due on May 15 shed 0.57% to $64.58 a barrel from the opening of $64.95, as the dollar index shed 0.24% to 89.68 from the opening of 89.89. 


Earlier US data showed consumer prices slowed down to 0.2% as expected from 0.5% in January, while core prices slowed down as well to 0.2% from 0.3% in January. 


On a yearly basis, consumer prices accelerated to 2.2% as expected from 2.1% in January, while core prices steadied at 1.8% in line with expectations.


US President Donald Trump abruptly fired Secretary of State Rex Tillerson and put in his place CIA Director Mike Pompeo, becoming another sign of instability in the administration. 


Otherwise, the Wall Street Journal reported divisions inside OPEC on the right price for oil, with Saudi Arabia looking for $70, while Iran looking for $60. 


90% of Saudi Arabia's government budget depends on oil returns, making it crucial to raise price targets, even though the country leads the deal to cut output by 1.8 million bod around the world in cooperation with Russia. 


Baker Hughes, an oil services company, recently released its report on the US oil rig count, showing a drop of 4 rigs for the first time in seven weeks to a total of 796 rigs, marching away from April 2015 peaks. 


US output rose 70 thousand bpd last week to a total of 10.37 million bpd, the highest on record. 


US production is up 21% since mid-2016, passing Saudi Arabia's 9.9 million bpd mark, and nearing Russia's 10.9 million bpd levels. 

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