OIL extended declines as the US dollar strengthened, adding more volatility to the market after a mixed industry report on US stockpiles.
Futures in New York have lost more than 3 per cent over the past two sessions in a volatile start to the week that included a brief surge to an October 2018 high on Monday. A stronger US dollar reduces the appeal of commodities priced in the currency. The American Petroleum Institute reported gasoline stockpiles fell last week, while crude inventories expanded, according to people familiar.
Despite the dip this week, crude is expected to resume its upward trend, which may encourage more activity from US drillers.
Oil production across American shale patches next year is expected to climb to the highest annual rate since 2019, according to a government report.
Oil is still up more than 30 per cent this year as the market tightens amid output cuts from Saudi Arabia and OPEC+, and as the demand outlook improves with the rollout of Covid-19 vaccines.
Tensions have also escalated in the Middle East after a key crude export terminal in the kingdom was attacked on Sunday, adding to a recent series of assaults on the major producer. BLOOMBERG