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22 May 2024

Oil slips below $110 on profit taking

By Agencies


Oil slipped below $110 (Dh403.70) on Friday as investors took profits after prices hit a record $111 (Dh407.37) in the previous session, but the depressed dollar was seen limiting losses.


US crude for April delivery fell 47 cents to $109.86 (Dh403.19) a barrel by 0930 GMT. It touched a record for the seventh time in a row in the previous session and is up nearly 8 per cent this month and about 14.5 per cent this year.


London Brent crude for April, which expires later in the day, dropped 35 cents to $107.19 (Dh395.99).


"It's a bit of profit taking, but it should be quite limited especially since we're coming to the weekend ... The dollar still seems to be the main driving force of the day," said Gerard Rigby, an analyst at Sydney-based Fuel First Consulting.


A steady stream of negative economic data in top oil consumer United States has raised fears of a recession and hit the dollar, lifting nominal prices of most commodities traded in the currency despite a risk of a downturn in underlying demand.


The dollar hit a record low against the euro and fell back towards a 12-year low versus the yen on Friday as rumours of more hedge fund failures stoked concerns about damaged credit markets.


"Depending on what happens for US economic news, crude may trade between $100 and $110 next week," said Rigby.


Market players will look towards US economic figures due later on Friday, including February US inflation data and the Reuters/University of Michigan survey on consumer sentiment, for indications on the state of health of the world's top economy.


Inflation in consumer nations have been creeping up due to high energy costs, but the Organization of Petroleum Exporting Countries again shrugged off calls for more oil to pull record prices back, giving support to crude prices.


Qatar's oil minister said on Thursday that crude oil supplies were "very comfortable" and there is enough oil on the market for stocks to build.


Despite OPEC's stance, oil exports, excluding Angola and Ecuador, would fall 100,000 barrels per day (bpd) in the four weeks to March 29, partly reflecting a seasonal decline in demand, said Roy Mason, an analyst at British-based consultancy Oil Movements who tracks future flows.  (Reuters)