Oil Prices Hit Reverse Again

Oil prices hit reverse again

LONDON,(UrduPoint / Pakistan Point News -25th Augst,2016) - World oil prices skidded lower Thursday, reversing earlier gains as traders dwelled on rising US crude stockpiles and the stronger dollar. At 1145 GMT, US benchmark West Texas Intermediate (WTI) for delivery in October sagged 22 cents at $46.55 per barrel. Brent North Sea crude for October delivery lost 20 cents to $48.85 a barrel compared with the close on Wednesday. "It is the aftershocks of yesterday's disappointing oil report and the strengthening of US Dollar that are helping to apply renewed downward pressure on crude prices," City Index analyst Fawad Razaqzada told AFP. The stronger greenback makes dollar-priced crude more expensive for buyers using weaker currencies.

In turn, that tends to dampen demand and price levels. The US energy department said Wednesday that American crude oil inventories soared 2.5 million barrels last week, indicating poor demand. Both main oil contracts plunged on the news, which confounded forecasts for a fall and fanned worries about the stubborn global supply glut. Meanwhile, hopes for a deal to limit oil output were dealt a blow. The commodity entered a bull market last week -- a 20 percent rise from recent lows -- and rallied for seven straight sessions thanks to news that export grouping OPEC and Russia would hold talks on output to address the oversupply crisis.