Oil slips below $55

LONDON:

Oil slipped below $55 a barrel yesterday as a stronger US dollar weighed on commodities and as higher Libyan output threatened to counter some of the supply cuts planned by OPEC and other producers. Crude is still trading around its highest since mid-2015, supported by a deal by the Organization of the Petroleum Exporting Countries and non-members to lower output by almost 1.8 million barrels per day from Jan 1.

Brent crude was down 54 cents at $54.51 a barrel at 1300 GMT, after rising 1.1 percent on Thursday. It reached $57.89, the highest since July 2015, on Dec 12. US crude fell 51 cents to $52.44. “There’s some profit-taking after the last session’s gains. Oil prices are also weaker due to the stronger dollar,” said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney.

Also weighing on oil was a surprise increase in US crude stocks reported on Wednesday in the government’s weekly supply report - and the prospect of sales beginning in January of crude from the US Strategic Petroleum Reserve (SPR). “Crude failed to maintain gains this week following the unexpected build in US crude stockpiles, which revived the oversupply concerns,” said Lukman Otunuga, a research analyst with FXTM. “With some anxieties still lingering over the compliance side of the unexpected cut agreement, oil could end up extremely volatile with losses expected if production fails to decline.” — Reuters