Oil slips back

LONDON. — Brent crude prices dipped yesterday, edging lower for a second day, although an unforeseen drop in US oil inventories helped keep the market within sight of this week’s 2015 highs.

A rise in the dollar to one-month highs against the euro following a signal the previous day by the head of the US Federal Reserve that rates will continue to tighten, dampened the broader commodity markets and that weakness fed into oil.

Brent November crude futures LCOc1 were down 13 cents at $58,31 a barrel by 1347 GMT, while US November crude futures CLc1 were up 18 cents at $52,06. Turkey’s repeated threat to cut oil exports from the Kurdistan region in northern Iraq pushed the price close to $60 a barrel on Monday for the first time since June 2015.

“With a high of $59,49, Brent has failed a first attempt at $60 and we will see if there is enough in the weekly (energy inventory statistics) to try another attempt today.

“The Dollar Index is rising, it is still far away from the levels seen at the start of the year, but the oil price increase should have a positive impact on CPI which in turn will increase the odds of more US interest rate hikes,” Petromatrix analyst Olivier Jakob said.

Fed Chair Janet Yellen said on Tuesday it would be “imprudent” to keep rates on hold until US inflation hit the central bank’s target of 2 percent.

A stronger dollar often results in weaker oil prices, as non-US investors find it more profitable to sell assets priced in the US currency. Nonetheless, Brent is set for a 22 percent gain in the third quarter of this year, its largest rise in the period between July and September since 2004, thanks in part to co-ordinated output cuts. Reuters.