Oil prices fall on the U.S. dollar rising, expectations for supply gains

MELBOURNE (Reuters) – Oil prices fell on Friday as a result of falling bond prices to gains in the U.S. dollar and more supply was expected to return to the market with oil prices back above pre- spread.

U.S. West Texas Intermediate (WTI) crude futures fell 36 cents, or 0.6%, to $ 63.17 a barrel at 0241 GMT, surpassing all Thursday’s gains.

Brent crude futures for April fell 18 cents, or 0.3%, to $ 66.70 per barrel, after losing 16 percent Thursday. The April contract expires on Friday. The more active May contract fell 32 cents, or 0.5%, to $ 65.79.

“Bonds are selling reasonably aggressively and the U.S. dollar has burned in the morning. That gives us a bit of a headache for crude oil this morning, ”said Lachlan Shaw, head of product research at the National Bank of Australia.

A stronger green background makes oil with the price of the US dollar more expensive for those who buy crude in other currencies.

Despite the fall in prices on Friday, both Brent and WTI are on track for gains of around 20% this month, as markets have grappled with supply disputes in the UK. United States, while hopes are raised to boost demand with vaccine distribution.

Investors are promising that next week’s meeting of the Organization of Petroleum Exporting Countries (OPEC) and allies, known as OPEC +, will bring more supply back to the market, with the recent jump in prices and demand expected to improve as a pandemic locks locks will move into the northern hemisphere summer.

“The steps being taken this time around are particularly large (for OPEC +) with the fact that oil prices have surpassed pre-release levels, global investments continue to fall, and the spread of vaccines is increasing. accelerate, ”Shaw said.

“The market may be right to think at this price level and with what the fundamentals are doing, more supply will enter the market over time.”

U.S. crude prices are also heading against a headline due to a loss of seed demand after several Gulf Coast facilities were shut down during last winter’s winter storm.

Approximately 4 million barrels per day of capacity remains closed and it could take until March 5 for the entire capacity to resume despite the risk of delay, analysts at JP Morgan said in a note this week.

“The biggest concern for U.S. crude oil market participants is the recovery of brewing demand,” the analysts said.

“As the brewers assessed the damage they had done to their facilities, it was clear that the road to recovery would be over weeks rather than days. ”