Oil Ends Longest Bull Run

Oil prices fell more than 2% on Wednesday, ending their longest bull run in more than five years, as climbing OPEC exports and a stronger dollar turned sentiment more bearish. Benchmark Brent crude futures were down $1.14, or 1.3%, at $48.47 a barrel. Prices had climbed for eight straight sessions to Monday. US WTI crude futures were down $1.35, or 2.8%, at $45.72 a barrel, CNBC reported.

“The air is getting thin for oil prices. The price increase just ran out of steam, which is not very surprising, given the news flow of rising OPEC supplies,” said Carsten Fritsch, senior commodity analyst at Commerzbank. Another analyst said the strong dollar provided less incentive to invest in greenback-denominated commodities such as crude oil. Oil exports by the Organization of Petroleum Exporting Countries climbed for a second month in June, Thomson Reuters Oil Research data showed. OPEC exported 25.92 million barrels per day 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 that found output jumped to a 2017 high last month, as OPEC members Nigeria and Libya continued to pump more. Nigeria and Libya are both exempt from the output pact.

The bearish outlook also led Saxo Bank to cut its yearend Brent crude price forecast to $53 a barrel from $58.

“OPEC’s ability to maintain exports should be tempered by the need to keep more oil at home to meet increased domestic demand during the peak summer months,” said Ole Hansen, the head of commodity strategy at Saxo Bank.

Traders were also eying weekly US crude inventory data, delayed by a day due to the US public holiday on Tuesday.

A Reuters poll showed analysts expected weekly crude stocks to have fallen by 2.8 million barrels. The weekly data showed a surprise rise in inventories last week.