Reuters: Strong dollar pulls down oil despite tightening fundamentals
Oil prices fell on Friday, pulled down by a stronger dollar, but traders said there were signs that physical fuel markets were tightening after two years of ballooning oversupply, according to Reuters.
The dollar rose to its highest level since March against a basket of other leading currencies on Friday, potentially crimping demand as fuel becomes more expensive for countries using other currencies, Reuters wrote.
U.S. West Texas Intermediate (WTI) crude CLc1 was trading at $50.40 a barrel at 0208 GMT, down 23 cents, or 0.5%, from its last settlement.
International Brent crude oil futures LCOc1 were down 19 cents, or 0.4%, at $51.19 per barrel.
Crude prices fell over 2% in the previous session on the back of the soaring dollar, according to the report.
Despite the falls, overall sentiment in physical oil markets was confident as there are mounting signs of a tightening oil market.
"The near-term fundamentals in the oil market have turned positive. Demand is stabilizing, OPEC production has peaked (and will fall if cuts are implemented), and global inventory declines imply that the market is more balanced than many believe," Neil Beveridge of Bernstein Energy said in a note to clients.
The Organization of the Petroleum Exporting Countries (OPEC) plans to implement a 0.5 to 1 million barrels per day production cut after a meeting on November 30.
OPEC's current output stands at a record 33.6 million barrels per day.