Oil prices fell more than one percent on Wednesday, ending their longest bull-run in over five years, as climbing OPEC exports and a stronger dollar turned sentiment more bearish.
Benchmark Brent crude futures were down 69 cents, or 1.4 percent, at $48.92 a barrel by 0900 GMT. U.S. WTI crude futures were down 80 cents, or 1.7 percent, at $46.27 a barrel after reaching a fresh one-month high of $47.32 earlier in the session.
“High June OPEC production and the recent strengthening of the dollar should cap any attempt to push prices higher,” said Tamas Varga, senior analyst at London brokerage PVM Oil Associates.
Oil exports by the Organization of the Petroleum Exporting Countries climbed for a second month in June, Thomson Reuters Oil Research data showed.
OPEC exported 25.92 million barrels per day (bpd) in June, up 450,000 bpd from May and 1.9 million bpd more than a year earlier.
The rise in exports comes despite OPEC’s vow to rein in production until March 2018 and follows hot on the heels of Reuters’ monthly OPEC production survey which found output jumped to a 2017 high last month as OPEC members Nigeria and Libya continued to pump more.
Traders were also eyeing weekly U.S. crude inventory data, delayed by a day due to the U.S. public holiday on Tuesday.
A Reuters poll showed analysts expect weekly crude stocks to have fallen by 2.8 million barrels. The weekly data showed a surprise rise in inventories last week. [EIA/S]
A firmer dollar also provided less incentive to invest in greenback-denominated commodities such as crude oil.
Ongoing global security risks prevented any significant downside including North Korea’s missile test and a political crisis between Qatar and an alliance of Arab nations led by Saudi Arabia and the United Arab Emirates.
“Rising geopolitical risks should provide some support to gold and oil prices,” ANZ Bank said on Wednesday.
