Daily Times

LONDON: World oil prices dropped on Thursday, reversing earlier gains as traders dwelled on US crude stockpiles’ rise and a stronger dollar.

US benchmark West Texas Intermediate (WTI) – for delivery in October – sagged 22 cents at $46.55 per barrel. Brent North Sea crude lost 20 cents to $48.85 a barrel compared with the close on Wednesday.

“It is the aftershocks of yesterday’s disappointing oil report and the strengthening of US dollar that are helping to apply renewed downward pressure on crude prices,” City Index Analyst Fawad Razaqzada said.

The stronger greenback makes dollar-priced crude more expensive for buyers using weaker currencies. In turn, that tends to dampen demand and price levels. The US energy department said on Wednesday that American crude oil inventories soared 2.5 million barrels last week, indicating poor demand.

Both main oil contracts plunged on the news, which confounded forecasts for a fall and fanned worries about the stubborn global supply glut. Meanwhile, hopes for a deal to limit oil output were dealt a blow.

The commodity entered a bull market last week – a 20% rise from recent lows – and rallied for seven straight sessions due to reports that export grouping OPEC and Russia would hold talks on output to address the oversupply crisis.