Singapore | Oil extended losses in Asia today as a stronger US dollar and progress in controlling wildfires in Canada’s crude-producing Alberta province dampened prices. Hawkish remarks by US Federal Reserve officials hinting at a June interest rate hike pushed up the greenback against major currencies. A stronger US dollar continued to extend pressure on commodity prices, CMC Markets analyst Margaret Yang said in a note. A stronger US dollar makes dollar-priced commodities like oil more expensive, curtailing demand.
At around 0930 IST, US benchmark West Texas Intermediate for July delivery was down 17 cents at USD 47.91. Brent North Sea oil, the European benchmark, for July was down 20 cents at USD 48.15.
Prices have rebounded since plunging to near 13-year lows below USD 30 in February but are still well short of peaks of more than USD 100 a barrel reached in June 2014. There are market concerns that a supply glut may return following news of Canada lifting evacuation orders for several oil production sites in fire-ravaged Alberta province amid cooler weather and light rain. Prices were also weakened by comments from Iranian officials who vowed to keep up oil production after the lifting of Western sanctions in January. USD 50 appears to be the resistance level because there seems to be not enough of a will to boost it any higher, IG market strategist Bernard Aw told AFP.
All eyes are now on the OPEC meeting in Vienna on June 2 where it is hoped an agreement to cut production can be reached, Aw said. The market is also keeping an eye out for inventory data from the American Petroleum Institute, which is due later today, followed by US Energy Information Administration data tomorrow.