Oil down in Asia on US stockpiles gain, stronger dollar
SINGAPORE–Crude prices were lower in Asian trade Friday on a rise in US stockpiles, with the strong dollar also putting pressure on prices, analysts said.
New York’s main contract, light sweet crude for delivery in June shed 24 cents to $96.15 a barrel and Brent North Sea crude for June delivery was down 20 cents to $104.27 in morning trade.
“The main downside factor on prices right now is the huge oversupply in the United States,” Kelly Teoh, market strategist at IG Markets in Singapore, told AFP.
The US government’s Energy Information Administration (EIA) earlier this week said that American crude stocks rose to 395.5 million barrels in the week ending May 3, the highest level since 1982.
The buildup in US supplies indicates production is outstripping demand, putting downward pressure on prices.
US inventories are a vital focus for traders because the United States is the world’s biggest economy and its largest oil-consuming nation.
An overnight surge in the US dollar past the 100 yen mark was also weighing on oil prices, analysts said.
The greenback added to its gains in mid-morning Asian trade Friday, changing hands at 100.91 yen against 100.55 yen in New York Thursday afternoon.
A stronger dollar tends to curb demand for dollar-priced crude oil from buyers wielding weaker currencies.