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Oil prices fall as strong dollar wipes out OPEC cut optimism

18 November 2016 02:21 (UTC +04:00)

Baku-APA. Oil prices fell in early trading on Friday as the strengthening U.S. dollar snuffed out rekindled hopes that OPEC might agree production cuts, APA reports quoting Reuters.

U.S. benchmark West Texas Intermediate (WTI) crude futures CLc1 were down 53 cents from their last settlement, or 1.17 percent, at $44.89 a barrel at 0107 GMT. International Brent LCOc1 crude futures were down 46 cents, or 0.99 percent, at 46.03 a barrel.

A stronger U.S. dollar makes oil, which is priced in dollars, more expensive to buyers in other currencies.

"Oil traded in a sideways range overnight, as stronger U.S. dollar (overhadowed) optimism from Saudi's Energy Minister over a production cut agreement," said Jeffrey Halley, senior market analyst at OANDA brokerage in Singapore.

"With the dollar reigning supreme, Asia trading of crude should have a slightly heavy tone today as traders lighten up positioning into the weekend," Halley said.

The U.S. dollar index .DXY reached a 13-1/2-year high on comments by U.S. Federal Reserve Chair Janet Yellen as she said the rate increase could happen "relatively soon", indicating higher chances of the rate hike in December.

"Commodities were mixed, with the stronger dollar creating headwinds for the sector. Brent crude oil traded around $46 per barrel as investors saw an increasing chance that OPEC would reach an agreement on production cuts," Australian bank ANZ said in a note.

Saudi Arabian Energy Minister Khalid Al-Falih's optimistic comments on potential OPEC cuts came ahead of a meeting of key oil exporters' officials scheduled to take place between 0530 GMT and 0730 GMT on Friday.

The oil exporters' representatives - from Saudi Arabia, Algeria, Russia, Iran, Kuwait, Libya, Venezuela, Bahrain, the United Arab Emirates, Qatar and Nigeria - are meeting in Qatar's capital Doha to discuss details of a potential deal on output cuts.