Oil prices extend losses on supply worries

Oil prices dipped on Monday, extending last week’s losses on fresh worries about a global supply glut as more US rigs come back online and the dollar strengthens.

Both contracts sank Friday after a report showed the number of active US installations rose for a fourth straight week as relatively high prices firms tempted companies to reopen facilities.

However, the increase in production adds to an already painful oversupply crisis.

“Crude oil markets have been under pressure as oil sup- plies have started growing with the resumption of output from the capacity lost due to wildfires in the Canadian oil sands,” EY oil and gas head Sanjeev Gupta said in a note, referring to blazes that hit the country’s key oil fields.

Canada is the largest supplier of crude to the US.

Gupta said media reports of increased production from Iraq have also added to market pressure.

Official US data last week showed that while crude supplies decreased, gasoline supplies remained high even dur- ing the crucial summer holiday driving season.

The dollar has picked up in recent weeks as central banks around the world prepare to unveil fresh stimulus measures at the same time as strong US data fuel speculation the US Federal Reserve will lift interest rates.

Prices have fluctuated between $ 43 and $ 52 per barrel since early June after falling below $ 30 in February on the back of the world supply glut and weak demand.