Oil prices extend losses on US oversupply concerns

Global oil prices declined in European trade for the fourth straight session under pressure from the stronger dollar. 

Concerns are also mounting about US oversupply after commercial crude stocks spiked more than expected with US output hitting three-year highs. 

Global Oil Prices

US crude fell 0.5% to $78.10 a barrel, with a session-high at $79.50, while Brent declined 0.4% to $84.79 a barrel. 

US crude lost 0.4% on Wednesday, while Brent declined 0.2% away from multi-week highs. 

The Dollar

The dollar index rose 0.2% on Thursday, almost hitting six-week highs at 104.11 against a basket of major rivals. 

Such gains come after a spate of strong US data, especially US producer prices and unemployment claims data. 

Such data increases pressure on the Federal Reserve as inflation remains strong. 

US Stocks 

The Energy Information Administration reported a huge spike in US crude stocks last week, amounting to 16.3 million barrels to 471.4 million barrels, while analysts only expected a rise of 1.5 million barrels.

Gasoline stocks rose by 2.3 million barrels to 241.9 million, while distillate stocks fell 1.3 million barrels to 119.2 million barrels.

US Output 

The EIA reported that output remained flat at 12.3 million bpd, the highest since April 2020. 

The EIA expects a record output in March from the largest seven shale oil basins in the US.

US Decision

The US Energy Department said it'll sell 26 million barrels of the strategic reserves between April and June to contain prices.

Indeed, US strategic crude reserves are at 1983 lows after withdrawing a record 180 million barrels last year.