crude oil futures news

crude oil futures news

May 19th, 2016

Crude oil prices tumbled in North American trade on Thursday, adding to sharp overnight losses, as a surging U.S. dollar and an unexpected rise in U.S. crude inventories triggered selling.

The U.S. dollar surged to seven-week highs in early trade after the minutes of the Federal Reserve’s latest policy meeting rekindled expectations for a June interest rate hike.

Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.

Crude oil for June delivery on the New York Mercantile Exchange sank $1.03, or 2.14%, to trade at $47.18 a barrel by 13:50GMT, or 9:50AM ET.

A day earlier, New York-traded oil futures rallied to $48.95, the most since October 12, before turning lower after data showed that oil supplies in the U.S. registered an unexpected increase.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories unexpectedly rose by 1.31 million barrels last week to 541.3 million. Market analysts’ expected a crude-stock decline of 2.833 million barrels

Despite recent losses, oil prices have been well-supported in recent weeks due to a combination of Nigerian, Libyan and Venezuelan supply outages, declining U.S. shale output and reduced production of Canadian crude as a result of fires in Alberta’s oil sands region.

Nymex oil prices are up nearly 80% since falling to 13-year lows at $26.05 on February 11.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery slumped $1.12, or 2.25%, to $47.83 a barrel. On Wednesday, London-traded Brent futures jumped to $49.85, a level not seen since November 4.

Brent futures prices are up by roughly 85% since briefly dropping below $30 a barrel in mid-February, despite the collapse of talks at a Doha summit in April aimed at achieving a production freeze among OPEC and Non-OPEC producers. OPEC meets on June 2 in Vienna and may discuss the freeze initiative again.

Meanwhile, Brent’s premium to the WTI crude contract stood at 65 cents a barrel, compared to a gap of 74 cents by close of trade on Wednesday.