Crude Oil Drops Below $55

Crude Oil Drops Below $55Crude Oil Drops Below $55

Oil slipped below $55 a barrel on Friday as a stronger US dollar weighed on commodities and as higher Libyan output threatened to counter some of the supply cuts planned by OPEC and other producers.

Brent crude was down 34 cents at $54.71 a barrel after rising 1.1% on Thursday. It reached $57.89, the highest since July 2015, on Dec. 12. US crude fell 37 cents to $52.58, Reuters reported. Crude is still trading around its highest since mid-2015, supported by a deal by the Organization of Petroleum Exporting Countries and non-members to lower output by almost 1.8 million barrels per day from Jan. 1.

"There's some profit-taking after the last session's gains. Oil prices are also weaker due to the stronger dollar," said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney.

Also weighing on oil was a surprise increase in US crude stocks reported on Wednesday in the government's weekly supply report - and the prospect of sales beginning in January of crude from the US Strategic Petroleum Reserve (SPR).

"Crude failed to maintain gains this week following the unexpected build in US crude stockpiles, which revived the oversupply concerns," said Lukman Otunuga, a research analyst with FXTM.

"With some anxieties still lingering over the compliance side of the unexpected cut agreement, oil could end up extremely volatile with losses expected if production fails to decline."

Add new comment

Read our comment policy before posting your viewpoints