Oil prices down in Asian trade on strong US dollar, output levels
Oil prices dipped in Asia Tuesday owing a stronger U.S. dollar while investors expect the OPEC cartel to maintain output levels at a key meeting this week despite a global supply glut, analysts said.
U.S. benchmark West Texas In- termediate for July delivery eased seven cents to US$60.13 while Brent crude for July fell 15 cents to US$64.73 in afternoon trade.
Singapore’s United Overseas Bank said prices “retreated...on the impact of a strong dollar and worries of stubbornly high supplies as OPEC prepared to meet this week to targets.”
The dollar was at 124.65 yen in Tokyo Tuesday, slightly lower than 124.81 yen late Monday in New York but well above 124.12 yen on Friday and at highs not seen since December 2002.
A stronger greenback makes
stick to production dollar-priced oil more expensive for buyers using weaker currencies, denting demand and pushing prices lower.
Analysts expect the Organization of the Petroleum Exporting Countries (OPEC) to agree to continue pumping the same amount of oil when they hold their meeting in Vienna Friday.
The cartel produces about 30 percent of the world’s crude.
OPEC refused in November to cut its daily output target of 30 million barrels — where it has stood for more than three and a half years — despite a global supply glut.