Business World

Oil falls on strong dollar; Brent near 1-month low

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TOKYO — Oil prices on Monday extended declines from the end of last week amid a wider market sell off and a stronger dollar, with Brent crude falling to its lowest in nearly a month.

Other markets dropped as investors were spooked by Friday’s payrolls report from the US, which showed wages growing at their fastest pace in more than eight- and- a- half years, fueling inflation expectatio­ns.

Brent was down 68 cents, or 1%, at $67.91 a barrel at 0344 GMT, after falling 1.5% on Friday. Brent’s weekly drop was 2.75% last week.

US West Texas Intermedia­te ( WTI) crude declined 72 cents to $ 64.73 a barrel, after dropping 0.50% in the previous session. WTI fell by 1% during the last week.

“Oil is caught up in this general risk-off move, not helped at the margins by a little bit of strength in the US dollar,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.

Asian shares were down the most in more than a year on Monday as fears of resurgent inflation battered bonds.

Wall Street dropped last week from record highs as inflation concerns sparked speculatio­n that central banks globally might be forced to tighten policy more aggressive­ly.

The three major US indexes capped their worst weekly losses in two years, after closing at record highs the previous week.

“The size of the move in US equities doesn’t always mean this, but usually after a move like that and particular­ly when it follows such a long uptrend, there is follow through selling,” Mr. Spooner said.

Rising US oil production has also helped push down oil prices, underminin­g attempts by the Organizati­on of the Petroleum Exporting Countries to support prices.

Data from the US government last week showed that output climbed above 10 million barrels per day in November for the first time since 1970, as shale drillers expanded operations after gains in oil prices last year.

“Over the course of the next few weeks one of the key things is going to be US production data and whether the increase in shale rigs recently is going to increase,” Mr. Spooner said.

US energy companies did add oil rigs for a second week in a row last week, energy services company Baker Hughes, Inc reported on Friday. Drillers added six oil rigs in the week to Feb. 2, bringing the total to 765.

Hedge funds and money manager reduced last week their bullish positions on US crude, cutting their net- long positions from a record after three weeks of increases. —

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