Oversupply Keeps Oil Prices Down

U.S. crude stockpiles rose last week, the American Petroleum Institute announced on Tuesday, with the U.S. adding 1.6 million barrels, bring its total to 497.2 million barrels. OPEC supply also remained higher than expected despite the group’s commitment to cutting production.OPEC’s increased supply is largely due to high output from Libya and Nigeria, two member-states that are currently exempt from OPEC’s imposed production cuts.

Brent crude was trading at $48.79 per barrel at 10:55 a.m. HK/SIN, down 12 percent, while U.S. WTI crude futures were down 0.13 percent to $46.34 per barrel. According to Reuters, Saudi Arabia has recommitted to bringing stability to the oil markets and to balancing the rise in Libyan and Nigerian production through other efforts. These comments were made after a report by the UK-based Petroleum Policy Institute reported that Saudi Arabia was considering reducing its own exports by 1 million barrels per day to offset the higher exports from Libya and Nigeria who are not expected to comply with a cap imposed on their production. Data out on Tuesday confirmed that Saudi Arabia’s crude oil exports declined in May from 7.006 million barrels per day to 6.924 million barrels per day.

Dollar Struggle Continues

The dollar continued to struggle on Wednesday morning, trading mostly flat against its primary trading partners. The dollar was unchanged against the yen, trading at 112.04 after hitting a low of 111.685 yen. The euro also remained firm, trading at $1.1536 after hitting a 14-month high of $1.1583. The dollar also hit a two-year low against the Australian dollar on Thursday morning.