Oil hit by strong dollar, jitters over supply glut

London

OIL prices sank last week to one-month lows on the back of the strong dollar and global supply glut fears, ahead of the Organization of the Petroleum Exporting Countries (Opec) cartel output meeting this week. The rising greenback makes dollar-denominated commodities more expensive for holders of other currencies. That tends to dent demand and prices.

Meanwhile the Opec, which pumps about 30 per cent of global crude, meets on June 5 for a production gathering in Vienna.

London Brent oil dived to a six-week low and New York crude to a four-week trough on Thursday, as the market was shaken once more by the rebounding dollar and stubborn jitters over the global supply glut.

"Brent and WTI futures have been set for a monthly decline as the strong dollar dominates the oil market," said Sucden analyst Myrto Sokou. "Crude oil inventories have started to decline since mid-April 2015, suggesting a possible recovery of the US oil demand. "However, the strong dollar seems to limit any strong gains in the oil market for…